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GCSE Business 2020-2022 OCR

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Question:

What is Trade Credit and give Advantages and Disadvantages for it

Author: eric_galvao



Answer:

-Given by a Supplier of the Business, meaning that they can have the Goods now, and Pay Later A: The Business can then use the Goods in the Manufacturing Process and possibly Sell the Goods before it needs to Pay Back, Improving the Cash Flow A: Very easy to Maintain D: If Bills aren't paid on Time then Trust will Crumble and Reputation will Drop D: Risk for New Businesses as they may just Fail and Shut Down before the Supplier gets Paid, so the Supplier gets Nothing


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