Trade Credit: Decisions and Optimal Terms

Credit risk is often invisible — until it’s too late. A customer who looks solid on paper might still default if their business model is weak or if external shocks hit. In this session, we unpack how to evaluate a customer’s financial reliability before extending credit.

You’ll explore both qualitative and quantitative assessment methods, including financial ratios, behavioral indicators, and market signals. You’ll learn how to spot red flags early, differentiate between temporary and structural risk, and use external sources like credit reports wisely.

We also discuss how to build a reliable internal decision process, so that credit checks become part of your business rhythm — not just a box to tick.

Not all terms are created equal, and the wrong ones can cost you dearly. In this lecture, we examine the many drivers of payment term decisions — from customer type and competitive landscape to cash flow and seasonality.

You’ll learn how to define payment schedules that are commercially attractive yet financially sound. We’ll explore how to tailor terms by customer segment, introduce tiered models, and implement flexible but controlled negotiation ranges.

Additionally, you’ll gain insight into what separates high-performing companies: their ability to proactively manage terms as a strategic lever, rather than letting them evolve by default or under sales pressure.

Credit demand is the hidden force behind trade finance. Every time you grant terms, you're making a temporary loan — whether or not you realize it. In this lecture, you’ll learn how to estimate and manage credit demand across deals, customers, and time periods.

We’ll cover how to calculate exposure under different payment terms, model scenarios for volume growth, and understand how this affects working capital and cash flow. We’ll also examine the link between credit demand and financing needs — from bank loans to internal capital buffers.

The tools you gain here will help you go from reactive to proactive in managing financial exposure in credit-heavy businesses.

In the dynamic realm of financial services, trade creditors wield an arsenal of powerful instruments, each a unique conduit for the art of credit risk transfer. These instruments, like the symphony of a skilled orchestra, harmoniously pass the torch of risk to a trusted third party. Yet, the Letter of Credit dances to a different rhythm compared to the graceful movements of Credit Insurance and the steadfast stance of the Bank Guarantee.

Every instrument, a star in its own constellation, illuminates a specific purpose. The expertise to discern these intricacies and elegantly weave them into the fabric of trade credit transactions rests within the repertoire of every B2B adept. This lecture contains the distilled method both lucid and profound. It's a compass that guides you in sculpting the perfect symphony of credit security, tailored to the unique contours of each engagement.

The final lecture is where strategy meets execution. Here, we integrate all elements — customer assessment, payment terms, credit volume, and risk mitigation — into a coherent credit structure that meets the needs of the business.

You’ll explore how to set terms that support sales while minimizing bad debt and administrative burden. We’ll share techniques for aligning internal teams (sales, finance, legal) and for communicating terms effectively to customers.

You’ll also see how to monitor and refine your strategy over time, using data and feedback to improve outcomes. The goal: empower your company to offer credit terms that make customers want to come back, while protecting your bottom line at every step.