Trade Reference Definition & Meaning

Reviews are not provided or commissioned by the credit card, financing and service companies that appear in this site. Reviews have not been reviewed, approved or otherwise endorsed by the credit card, financing and service companies and it is not their responsibility to ensure all posts and/or questions are answered. Furthermore, credit agencies only receive trade references from a small list of companies. This means that most B2B activity will not be recorded in their database. This has implications for small businesses as often the documented credit history appears far less robust than it actually is.

You want to keep your credit account with suppliers in a good place. Allow a few weeks to get a response, and account for this in your timeline for applying for the business loan. Once you receive it, you can include it in your loan application.

Some companies that extend trade credit will not check the business owner’s personal credit reports at all. Others might do a “soft check” to rule out low personal credit scores. That means you might be able to secure credit with suppliers even as you work on your personal credit. Good trade references can be helpful when it comes to qualifying for small business financing.

You might get a trade credit line with your office supply store or the company you buy your inventory from. You can build your credit several ways, but one of the easiest ways to get started is with trade references. Trade Referencemeans any company which has an ongoing credit relationship for business purposes with the licensee, and is willing to discuss the licensee’s account history. Automatically capture bank references from customer credit applications and automate the bank reference verifications. Any misrepresentation or fraudulent information provided will be the basis for default under this agreement.

It is not common these days for banks to request trade references when extending credit, though you should be prepared to provide these references whenever you apply for financing. A trade reference is a supplier, vendor, or other business from which you’ve bought a service or product — not just bought but also paid for. Paying for the product or service is a critical part of establishing a good trade reference. The process of establishing trade references is similar to building personal credit.