Del Campo Supreme’s application asks for five trade references. While there are no rules governing trade references, Jimenez prefers business partners within the produce industry. “If [the applicant] gives me a trade reference for paying the water company, that doesn’t do much for me. I need a trade reference that they deal with daily,” she says. “I was in banking for 22 years, so I can see through the application and report whether a customer is going to be a good or bad risk to our company,” she adds.
Creating A Good Credit Application
According to Puru Grover, managing director of corporate credit and risk management solutions at Credit Guru in Toronto, Ontario, there are a number of elements that belong on every credit application. Here’s a quick reference list for purveyors of produce:
• Legal company name, along with any other “doing business as” or trade variations
• Type of business (sole proprietor, partnership, limited liability corporation)
• Sector or industry (some areas, such as the retail and service industries, tend to have higher rates of failure)
• Product or service type (this, too, adds to risk factors, i.e., bulk produce vs. fresh-cut or processed items)
• Number of years in this business sector
• Bank reference(s)
• Trade references – while three seems to be the typical number, some creditors request more and always ask for at least one from within the produce industry
• Website and applicant email address – can help authenticate a business and serve as valuable communication tools
• Terms and conditions – provide clear, concise wording of all terms and conditions
• Disclaimers – always include language detailing the following:
(a) permission to contact banks or financial institutions and trade references – both upon completion of the application and in the future;
(b) the applicant certifies information is true and correct to the best of his/her knowledge;
(c) upon signing, the applicant is bound by the terms and conditions set forth;
(d) a statement regarding allowable interest charges (which can vary by state of jurisdiction); and (e) that a faxed or scanned application can be deemed as original
• Signature – only an authorized individual (generally a company officer) is eligible to fill out and sign the credit application.
Outside Sources Provide Supplemental Information
Of course, every credit or finance manager would prefer a wealth of accurate information on every customer—but reality often dictates far less. “We don’t get perfect information,” concedes Brown. “We get incomplete information all the time, but we still have to make decisions. That’s why we try to confirm things by outside information or our historical records. We tend to look at things historically, factually, and unemotionally.”
