Awesome! Trade References Can Help in the Slump Economy

Learn the Secrets of Trade References in the Slump Economy Today

You may have heard or read the term ‘trade reference’, but do you really know what it’s all about? Are you asking yourself, what are trade references on a standard business credit application? What are the most important things you should know about trade references? How can they help you in a slump economy?

Building corporate credit is more than just the objective information. It’s also about the subjective. So sit tight, because here are the details.

Recession Era Funding

The number of American banks and also thrifts has been decreasing progressively for a quarter of a century. This is from consolidation in the marketplace as well as deregulation in the 1990s, lowering barriers to interstate banking. See: https://www.fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts

Assets focused in ever‐larger banks is problematic for small business owners. Big banks are much less likely to make small loans. Economic downturns imply banks come to be extra cautious with financing. Luckily, business credit does not depend on banks. And it is utterly independent of any pandemic.

Things You Should Know About Trade References: 5. Just What is a Trade Reference in a Slump Economy, Anyway?

Here is a standard trade reference definition. A trade reference on a credit application is used to help lenders and business to business suppliers make decisions about whether or not to extend credit to a credit applicant.

So, what are trade references on a credit application? They are one of the only parts of a credit file that isn’t just numbers or court filings!

These credit references for businesses are usually presented in conjunction with a formal credit report. Such a formal credit report would come from a known business credit-rating agency. These are the best-known CRAs, such as Experian or Dun & Bradstreet.

Companies and banks which loan money and extend credit want to be sure that their customers can pay their debts on time and in full. Excellent trade references are an important asset which successful companies should place a high value on.

A trade reference means there is more to go on that numbers. With trade references on credit application, there is a lot more detail.

Things You Should Know About Trade References: 4. Criteria for a Business Trade Reference in a Slump Economy

Lenders and credit suppliers will often ask just how long an account has been open. They will ask about its credit or purchasing limit. And they also want to know how many times (if any) the amount due has been paid late. Such inquiries can come either by phone or in writing.

Creditors naturally place a higher value on customers with longstanding payment histories. Plus they often will save their best deals for credit applicants with the best trade references and credit profiles.

Things You Should Know About Trade References: 3. A Trade Credit Reference Can Provide an Accurate and Correct Picture, Even in a Slump Economy

Some banks may not report negative payment histories to the big national credit bureaus (Experian, Equifax, and Dun & Bradstreet) until the borrower is 30 or 60 days late.

And some suppliers, in particular smaller businesses, will not report their client histories at all. These factors make checking trade references vital when companies are making the decision to extend credit.

In addition, month to month payment histories will always represent a far more accurate picture of a small business’s true financial viability. This is because even companies with good cash flow could be taking unreasonable risks at the expense of their suppliers.

Things You Should Know About Trade References: 2. Bank and Trade References Showcase Timely Payment and Repayment, Especially in a Slump Economy

Most businesses realize that maintaining a prime credit rating is very important. Therefore, if they start struggling, they may become good at prioritizing their debt and supplier payments.

This is like the old expression, ‘robbing Peter to pay Paul’. By using their cash flow to pay any bank loans and larger suppliers, they might also be putting off smaller creditors. In this way, these businesses on the edge can paint a misleading credit portrait.

Therefore, it is important to start checking both large and small references. As a result, you can save yourself the time and headaches of taking on new clients whose accounts have a high chance of going into collections.

This is true of both companies looking to extend credit, and banks looking to make loans. And for startups, this is really vital. It helps a lot to get trade references for new business.

Things You Should Know About Trade References: 1. What About the Number and Sort of Trade References in a Slump Economy?

A standard business credit application will ask for three trade references. These are often creditors and suppliers within the industry. Trade reference examples tend not to be utilities like telephone and gas service.

This is because many struggling businesses may try to put off their suppliers for a month or two, but not the utility companies. At least, they won’t do this if they want their offices to have heat and lights.

Primary and direct references, which include suppliers of items such as computer equipment and raw materials, will be the most valuable.

Secondary trade references may include subcontractors who may be willing to not be paid until the main client pays. As a result, these examples of credit references can be less reliable indicators of a small business’s overall financial health. Still, you should take any negative feedback on a trade reference sheet seriously.

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Things You Should Know About Trade References: Bonus #1 for a Slump Economy: How to Make a Credit Reference Request if You Are the Creditor Asking About a Company You Do Business With

A trade reference sample is best. This great business credit reference form came from Business Debt Line. Make sure to fill in the blanks or information in square brackets [].

Same Trade Reference Request Letter for Creditor

From:

__________ [Sender’s name]
__________ [Sender’s address]
__________
__________

Date: __________ [Sender wrote the letter on this date]

To:

__________ [Receiver’s name]
__________ [Receiver’s address]
__________
__________

Dear Sir/Madam:

Re: [enter the name of the company you are asking about here]

I have received an application for a credit account from the above named company. Your name has been given as a referee. Therefore, I would be grateful if you could answer the following questions.

How long has the customer traded with you? ________________________________
What are your terms of payment? _______________ days
Does the customer generally pay within the time required? YES/NO
Would you consider the customer to be a good credit risk? YES/NO

Please add any other comments you feel are relevant below.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Once you have completed this form please return it in the envelope provided.

Thank you for your assistance.

Yours faithfully,

Signature

Name

For and On Behalf of Your Business

Slump Economy Recession Credit Suite

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Things You Should Know About Trade References: Bonus #2 for a Slump Economy: How to Ask for One if You Need a Trade Reference for Your Company

Let’s use another business credit application sample. Make sure to fill in the blanks or information in square brackets [], and select anything with a slash (/) and delete the other choice. This is a great trade reference form template.

Same Trade Reference Request Letter for Company

From:

__________ [Sender’s name]
__________ [Sender’s address]
__________
__________

Date: __________ [Sender wrote the letter on this date]

To:

__________ [Receiver’s name]
__________ [Receiver’s address]
__________
__________

Dear Sir/Madam:

Re: Trade Reference for [your company]

It has been [your company]’s pleasure to conduct business with you for [number] years/months. The company is applying for more credit, and I hope to be able to cite your name as a referee. Would that be possible? Please let me know either way.

If the answer is yes, then I have prepared a few brief questions. Please send back in the enclosed envelope and we will type it up. We will send it back with another self-addressed, stamped envelope, so you can send us a signed copy. Of course we will enclose a copy for you to keep for your records.

Therefore, I would be grateful if you could answer the following questions.

How long has [your company] traded with you? ________________________________
What are your terms of payment? _______________ days
Does [your company] generally pay within the time required? YES/NO
Would you consider [your company] to be a good credit risk? YES/NO

Please add any other comments you feel are relevant below.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

Once you have completed this form please return it in the envelope provided.

Thank you for your assistance.

Yours faithfully,

Signature

Name

For and On Behalf of Your Business

Slump Economy Recession Credit Suite

Hit the jackpot and weather any recession with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Things You Should Know About Trade References: Bonus #3 for a Slump Economy: How to Write a Trade Reference Letter About a Company You Do Business With

Let’s start with a trade reference example. Make sure to fill in the blanks or information in square brackets [], and select anything with a slash (/) and delete the other choice in this trade reference form.

Sample Trade Reference Letter

From:

__________ [Sender’s name]
__________ [Sender’s address]
__________
__________

Date: __________ [Sender wrote the letter on this date]

To:

__________ [Receiver’s name]
__________ [Receiver’s address]
__________
__________

Subject: Trade Reference for [company name]

Dear Sir/Madam:

Thank you for requesting a trade reference. We have done business with the [company name] for [amount of time]. Our terms of payment with them are [number] days.

[Company name] generally pays/does not pay within the time required. Payment patterns with [company name] are/are not subject to seasonal fluctuations. I would/would not consider the customer to be a good credit risk.

If you have any questions, please feel free to contact me.

Yours faithfully,

Signature

Name

Business Name

Things You Should Know About Trade References: Bonus #4: What to Do with a Trade Reference Request About Your Company

Send a copy of your trade reference to Dun & Bradstreet here. It will become part of your credit report, available to anyone who pulls your report. Because D&B gives trade references meaning – slump economy or not.

Things You Should Know About Trade References in the Slump Economy: Takeaways

So, what is trade references? Trade references for a small business can provide a much clearer picture of the overall health and day to day operations of a company. These allow a credit or loan provider to dig much deeper into the financial guts of a company.

What is trade reference meaning? What is a trade reference on a credit application? This is the best way to get to the real truth about the business’s financial viability. And that goes double in a slump economy.

 

The post Awesome! Trade References Can Help in the Slump Economy appeared first on Credit Suite.

Smash the Summer Selling Slump and More –10 Brilliant Business Tips of the Week

The Hottest and Most Brilliant Business Tips for YOU – Smash the Summer Selling Slump and More

Our research ninjas at Credit Suite smuggled out ten amazing business tips for you! Be fierce and score in business with the best tips around the web. You can use them today and see fast results. You can take that to the bank – these are foolproof! Smash your summer selling slump and keep your revenues so hot you could fry an egg on them. And more!

Stop making stupid decisions and start powering up your business. Demolish your business nightmares and start celebrating as your business fulfills its promise.

And these brilliant business tips are all here for free! So settle in and scoop up these tantalizing goodies before your competition does!

#10. Your Marketing WILL Be Televised

Our first jaw-dropping tip is all about cutting costs and improving customer experience with your business’s TV set. That is, if your business has one. Lots of businesses with waiting rooms do. Noobpreneur says there are a few things you can do to take advantage of this bit of advertising real estate.

Our favorite tip was not to advertise your own business. Although of course we can see and applaud the use of a business TV set for this particular purpose.

Nope. What we liked better was using the TV to advertise other businesses. Of course you will charge for the privilege. And keep in mind, this will not succeed if your business isn’t much of a business leader in the area. But if your business fits the bill, then why not try this?

Pro tip: why not reach out directly to related businesses? So, for example, pharmacies could sell advertising space to local dentists. Day spas could sell ad space to local aesthetician-type businesses, such as hairdressers. Marketing synergy is a good thing.

#9. Do You Speak Design?

The next awesome tip is about presenting UI/UX designs to non-designers. Dribbble tells us one issue is just plain communicating. So, in the interests of full disclosure – UI means user interface. And UX means user experience.

The idea here is to make your website easy and enjoyable. And it should be clear and easy to understand. If you’ve ever loaded a s…l…o…w website or didn’t know how to get back to an earlier page, then you’ve witnessed, respectively, a lousy user interface and a terrible user experience.

What we really liked were the emphases on identifying a problem and demonstrating how your solution works. For the money people, this is key. After all, why pay for a design overhaul if you’re still left with the same old problems?

Summer Selling Slump Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Smash the summer selling slump and keep your business as hot as a summer sidewalk.

#8. Push-Me/Pull-You

Our following life-changing tip concerns using pull marketing when push marketing just plain isn’t cutting it. Startup Professionals lays it all out for us.

One thing which surprised us was how there are still some 25% of all businesses which don’t use social media at all.

Huh?

We can’t conceive of that these days.

And of the 75% which do, there are a number which just monitor and don’t engage.

Don’t be one of those companies. Not engaging, or worse, not being on social media at all, is like leaving free stuff behind. You’re tossing away free and (pretty) easy chances to get your brand out there.

Why the heck would you do that?

#7. How Much For Just the Planet?

For our next sensational tip, we looked at setting the proper prices for your goods or services. DIY Marketers has all the details.

This is a terrific article, and we recommend reading the whole thing as the process makes the most sense when you look at it in order. It’s a fascinating exercise. But it all starts with one thing – how much do you want to be making?

Say what?

Now this makes more sense than you might think at first glance. Consider this: we have covered goals many, many times here. And what’s the first thing you need for a goal to succeed?

Anyone?

Bueller? Bueller?

You need a target!

And what better target than to decide how much money you want to make?

A Fer Instance

Let’s play with a few quick numbers, for illustrative purposes only. So let’s say you want to make $100,000 per year. And let’s further say that you sell widgets. If you sell one widget at $100,000 then you’re done, right?

Not so fast.

More expensive goods and services require excellent customer service. So if you sell your one $100,000 widget, then you maybe you need a dedicated person to handle that account. They might not handle any other accounts, in particular if the customer is fussy.

So if you have to hire a dedicated account manager for $50,000 per year, then you’re only making a $50,000 profit on your one overpriced widget ($100,000 profit – $50,000 in overhead costs for your account manager’s annual salary).

Now you need to sell two widgets. And you need an account manager for each of them. This is a simplistic sample. So we’re not looking at other costs such as manufacturing or shipping.

Now let’s sell your widget for $10,000. Your account manager may be able to handle ten accounts now (just to use a simple number here).  Understandably, the customer service expectations are lower for cheaper widgets. So if your account manager still makes $50,000 per year, then once five widgets are sold, you’ve paid your account manager’s salary.

Sell 20 widgets and you’ve made your profit (you’re paying 2 account managers at $50,000 per year). If you give your account managers raises, you need to sell more product, or raise the price.

But at least you have a measurable goal. You know how close you are to making it. That matters more than nearly anything when it comes to pricing and budgeting.

#6. Improve Your Selling!

This tip is so helpful, and it works! The Work At Home Woman gives us the lowdown on how to get better at selling.

This one, of course, goes far beyond smashing a summer selling slump. It goes directly to the ultimate success – or failure – of your business.

Confidence SellsLow Sales in Summer Credit Suite

This was our absolute favorite tip. Of course, this can be easier said than done. But the bottom line is, we like to buy from confident people.  And there is a huge reason for this.

Who wants to buy from someone who doesn’t seem to believe in their own product?

So no matter if you are desperate in real life – and don’t think there aren’t any seasoned salespeople who aren’t – do your level best not to show it while selling. Now, that may be easier said than done.

But practicing, as the article says, is a great idea. No matter what, you need to know your product or service backwards and forwards. And a quick pro tip from your intrepid blog writer – not having to worry about knowing what to say rather effectively removes one reason to be nervous.

Get out of your summer selling slump and for gosh sakes, don’t let it turn into a winter sales slump.

#5. Smash Your Summer Selling Slump

Grab this mind-blowing tip while it’s hot!

The summer selling slump is real. Fundera tells us how to smash it.

From June to September, Things Get S…L…O…W

Even if you don’t actually have a summer selling slump, the truth of the matter is, your employees are going to be distracted.

The kids are out of school – and perhaps underfoot. It’s light out longer, so the end of the business day doesn’t coincide with nightfall. As a result, the days might feel longer, or shorter. It can be a bit disconcerting during about a month before or after the solstice. In all fairness, the same can happen around the time of the winter solstice.

We loved that some of the best suggestions had to do with keeping employees happy!

Keep Your Employees Happy

A few of these may very well seem like no-brainers. For example, creating Friday hours and allowing work from home seem to be almost intuitive. And so is changing to a casual dress code, even if it’s only for one day a week.

We also liked the idea of hiring a passel of summer interns. They can bring in a fresh perspective, even while they do the scut work. It’s hard to have a summer selling slump when there are new people around, with new perspectives.

A True Story

Over two decades ago, your intrepid blog writer worked in the insurance industry. Egad, has it really been that long? Eek.

But I digress.

Now, keep in mind that this is before businesses got too comfortable with the internet. And it is also before casual Fridays were the norm, rather than the exception.

So what happened?

We did what we could. And since this was an office in beautiful downtown Boston, there were plenty of places to get the signature food of the summer.

I’m talkin’ ‘bout ice cream, of course.

We used to get cones every Friday, just after lunch. So it would be maybe 2 PM or thereabouts. This activity did not take too long. It had the added bonus of getting outside, however briefly. We would come back to the office if we were not finished beyond a certain time. That was around 1:30 if memory serves.

It was fun and easy. And it didn’t even cost the company any money. We bought our own cones. This tiny break made it a lot more tolerable to sit in an office, in a suit, no less, during the best weather of the year.

Keep Your Customers and Prospects Happy

Of course, one part of a summer selling slump directly relates to your customers and prospects. Unless you want your employees to just sit around and play backgammon all day long, you are going to want to do something or other to bring in revenue.

So we really liked the idea of test launching a new product. In particular, if your website isn’t too busy, you will have an easier time of it when it comes to A/B testing and other details that go along with launching a product. Now, we would not recommend launching something big during this time. But if you have something minor, or just an extra to fling to the universe, why not do so during the slow months?

Summer Selling Slump Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Smash the summer selling slump and keep your business as hot as a summer sidewalk.

#4. Let the Leads Come to You

Check out this spectacular tip, all about effective inboard marketing strategies. Word Stream says it’s all about the quality content. That is, the high quality content.

One excellent point W0rd Stream makes at the very start is something we have been observing for quite a while now.

There is just a ton of content out there. And it comes at all of us, 24/7. So what is happening is, essentially, people are tuning out a lot of that content.

Don’t act so surprised! You do it. I do it. Everybody does it.

After all, there are just so many hours in a day. If we felt the need to consume every moment of content, every pixel of it, we would get nothing else done. Ever.

Consider this: in 2017, a good 300 hours of content was uploaded to YouTube. Every. Single Minute.

And that’s just YouTube. So it is just plain not physically possible to consume every bit of content.

As a result, we have all become curators. Like it or not, we sift through the tsunami of content. And we inevitably search for what moves us. This means that ho-hum content is not going to cut it for much longer.

So as a business, your mission is to release quality content.

What Sort of Quality Content?

The article – which we truly feel should be read in its entirety – goes over a lot of familiar forms of content. these include podcasts and, surprise! YouTube videos. And it does our hearts good to see the suggestion of books.

What is this telling us? It’s telling us that longer form content has heft. And that makes a ton of sense. We all consume the equivalent of an all-junk food diet when it comes to most content.

So throw your prospects and customers a full-course meal and they’ll see you as an expert. And that means they will trust your product or service.

#3. Don’t Be Spammy!

It’s not your imagination: this winning tip can help keep your sales emails out of prospects’ spam folders. Succeed As Your Own Boss tells us there are some tell-tale signs of spam – at least, that’s according to email carriers and internet service providers.

Some of these may be self-explanatory. For example, clean up your email address lists! The more bouncing back you get, the more you look like a spammer. And don’t email all at once – a big bulk email screams ‘Spam!’

Our favorite tip was to keep triggering words out of your emails! Those are phrases like ‘absolutely free’ or ‘instant access’.

Consider this: if your email looks like spam to you, it’ll look like spam to ISPs and email providers. And, even worse, it’ll look like spam to your customers and prospects.

You don’t want that. Ever.

#2. It’s All About the ‘Gram

Our second to last unbeatable tip can give you a new perspective on making your business Instagrammable. Small Biz Trends lets us know all about it.

For some businesses, Instagram is where they post images of their product or service. But for others, customers may be posting about the company.

For those latter businesses in particular, the idea is to showcase the work place well. Our fave tip was to create an interesting wall. That’s a real wall, by the way. The idea is, if there’s a good backdrop for photographs, then people will be all too happy to use it.

This is why you see so many exterior walls with wings or the like.

Pro tip: why not hire an artist for this? This person can even be an art student. Of course, ask for samples to be sure you like what you’re paying for.

And by the way, while this is likely to be best for businesses where the customers come there in person, why not paint an interesting exterior wall? Which just so happens to have your signage in the background?

#1. Things Can Always Get Better

We saved the best for last. For our favorite remarkable tip, we focused on how to change your business – for the better. Score says there are a number of steps you can take which will help you, no matter what sort of business you’re in.

We particularly loved two ideas – to get organized and to take a class. Both can refresh both you and your business.

Getting organized is key for your business and for you, personally. Consider all the time you may be spending looking for stuff. Now imagine having that time for something a lot more fun. Or more profitable. Or at least something which you need to get done.

Now you can.

And taking a class dovetails well with another tip, which is to get out of your comfort zone. You might be able to save time or money with what you learn. Pretty cold, eh?

But wait, there’s more!

While the article doesn’t get it, we couldn’t help but think about how taking a class in something utterly unrelated to your business can be just about as helpful.

So don’t feel confined to just taking accounting courses or software use training or the like. Unless you want to, of course.

Why not take ceramics, or philosophy, or music theory?

No learning is ever wasted.

So which one of our brilliant business tips was your favorite? And which one will you be implementing now?

Summer Selling Slump Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Smash the summer selling slump and keep your business as hot as a summer sidewalk.

The post Smash the Summer Selling Slump and More –10 Brilliant Business Tips of the Week appeared first on Credit Suite.