If you are a business owner that makes your money providing good or services to other business, you’ll most likely want to reward your good customers and make order-placing easier on them by extending credit. Let’s face it; businesses tend to spend more when they have a line of credit open to them. So it only makes sense that you can expand your business and increase your sales by providing a credit plan to your customers. This will allow them to purchase products or services today, and pay for them at a later date. In order to accomplish this, you’ll want to add a credit application form to your toolbox of business templates. We have a few for you to download on this page.
- 1 Credit Application Form Template
- 2 Why Should I Extend Credit Using a Credit Application Form?
- 3 Establishing A Credit Application Process
- 4 What Should My Credit Application Template Include?
- 5 Credit Application Form
- 5.1 More On Extending Credit and Credit Application Form Templates
If you’re a business that does work with consumers, extending credit is still an option for you. The risk that comes with extending credit directly to consumers is much greater, so you’ll need to use a credit application form and credit check to make a decision. Small retailers make up for this risk by charging higher interest rates. If your customers mostly make small purchases, it may not be a good idea to extend any credit. However, if you’re a private caterer who helps affluent people plan their parties, you may find that extending credit can help you grow your business. A credit application form will help secure the credit you extend by making sure that your customers have a stable track record of honoring their debts.
Credit Application Form Template
Credit Application Form 01
Credit Application Form 02
Credit Application Form 03
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Credit Application Form 05
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Credit Application Form 07
Credit Application Form 08
Credit Application Form 09
Why Should I Extend Credit Using a Credit Application Form?
Not sure you’re ready to extend credit? Think of it this way; you’re probably already doing it. Every time your business accepts credit card payments, checks or even sends invoices to customers, you’re essentially extending credit. You accept these payment types on the assumption that customers will have the funds to pay for the transaction. The only difference is that when you’re accepting credit card payments, your merchant account provider shoulders the risk. When you extend credit through invoices or checks, however, the risk is transferred to you. You’re the one responsible for verifying and accepting payments and managing the risks that come with them.
Some industries, such as construction companies or manufacturers, often extend credit by invoicing. Invoices are typically due net 30 days, or 30 days from receipt.
One of the main reasons businesses offer credit is to help customer focus less on prices and more on their needs. Having a credit option can help you make more sales and enhances your relationship with your customer.
It’s important to note that extending credit will cost you money if it’s done incorrectly. When you sell something on credit, you won’t have immediate reimbursement and you will need to temporarily make up for the cost, which usually means borrowing cash flow from other areas of your operating capital.
And if something happens and your customers are unable to pay, you may end up spending money on collection activity and other costly measures to try to recoup your losses.
Before handing out a credit form to all of your big customers, make sure that you have a legitimate business reason to extend credit. Assess the risks of having several of your larger customer default. If a financial crisis occurs, will you be able to stay afloat without counting your outstanding invoices as income? If you can’t shoulder much risk, it may not be the right time to extend credit to your customers. You should be able to extend credit without becoming overly reliant on it for income. In other words, your cash flow is your cash flow, and outstanding invoices may or may not be paid. Will it hurt your cash flow to extend credit that may not be paid back? If so, it may not be the right time to offer credit options to your customer base.
Establishing A Credit Application Process
Long before you offer credit to your customers, you’ll need to decide how you will manage credit accounts accounts. You’ll need to know if you can charge late fees (and how much you can charge) as well as collection laws in your area.
At this point, you’ll want to speak with a lawyer to understand the policies and procedures that are in place in your state when it comes to extending credit. Consumer protection laws vary widely, and there’s a lot of room for error. To abide by these laws, you’ll want to create a uniform process for extending credit and clearly map out your policies. Here are a few things to think about:
- Who are your ideal customers? Will you offer credit to individuals, or businesses?
- What company will you use to run credit checks your customers when they apply for credit?
- What are your payment policies? When will bills be due? What payment options will you offer?
- Who will your customers with credit plans contact when they have a question?
- How will you invoice your customers?
- Will you outsource any of these tasks to another company?
- How will you keep sensitive financial data safe?
- What’s our game plan for collecting late or delinquent account payments?
- What other considerations do you need to assess to comply with local laws?
Using these questions, you can create a firm credit policy that outlines everything from interest rates to procedures when a customer faults. Your customers should get a copy of these items in the mail once a year and be notified of changes. Usually, this is called “Terms and Conditions” and they can change according to the local as well as federal laws. Your terms and conditions should contain all legal information, dispute resolution procedures, and information on what happens when you must place an account in collections.
Credit Application Form 10
Credit Application Form 11
Credit Application Form 12
Credit Application Form 13
Credit Application Form 14
Credit Application Form 15
Credit Application Form 16
Credit Application Form 17
Credit Application Form 18
Credit Application Form 19
What Should My Credit Application Template Include?
When you’re preparing to launch a new credit program for your customers, you’ll need to get, and keep, all of your customers’ details in writing, and regularly ask them if the information is correct when you send the statement in the mail. The application you use will have important to documentation in case of fraudulent or delinquent credit transactions.
Other information that you will need on your credit application template:
- Income verification: For individuals, this means that you’ll want tax documents, bank statements, or the number of the HR department to confirm details of employment. For businesses, you may ask for a profit and loss statement, bank statements, tax documents, or other information that shows their regular profit.
- References: You will need to ask for financial references. For consumers applying for credit, this means banks, credit accounts, etc. For businesses applying for credit, this means vendors and any other creditors that they may have.
- Addresses: Addresses that an individual has lived at in the past two years are an important part of pulling a credit report. You’ll want to know what states, counties, and towns the individual has lived in so you can pull an accurate credit report. For a business, you’ll want all of the addresses the company does business at.
- Contact Phone Numbers: For individuals, this will be their cell phone, home phone, and work phone number. For businesses, you’ll want to get information on who is responsible for paying invoices.
- Tax ID and other identifying information: For individuals, this is their social security number. For businesses, you’ll want their tax ID and employer ID.
- Background information, assets: For individuals, you’ll want the names of their last two employers, employment dates, and any collateral such as equity in a home. For employers, you’ll want to know what type of equity they can offer, and how long they’ve been in business, and may even request backup documents such as a copy of the business plan.
- Signature: This is absolutely essential. Do not process a credit application without a signature giving permission for you to pull a credit report.
- Personal Guarantees: Some individuals will have somebody with a better credit record co-sign their credit application forms. That’s fine, but you’ll want to get all the information for this individual, as well, preferably on another application form. If you’re extending credit to a business, you’ll want to get personal details from the individual responsible for payment if the business fails to pay on time. This will usually be an officer of a corporation, the CEO, or another person in an upper management position.
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Credit Application Form 21
Credit Application Form 22
Credit Application Form 23
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Credit Application Form 25
Credit Application Form 26
Credit Application Form 27
Credit Application Form 28
Credit Application Form 29
When armed with this information, you can pull a rather thorough credit report for either an individual or a business. Credit reports typically show you information from the past seven years. There are three credit bureaus for individual consumers in America; Equifax, Transunion, and Experian. Equifax and Experian also have offices overseas, throughout Europe, in addition to a company named Callcredit Plc . Nowadays, many companies issuing credit will pull and collect a combined credit report that has detail from three bureaus. For a small business, this may be too expensive to muster. If you’re not sure which bureau to use, you may want to order a copy of your own credit reports and see which bureau appears to have the most accurate, up-to-date information.
When you pull a credit report for a business, you’ll probably be using Dunn & Bradstreet to pull the information. It’s the largest and most well-known business credit bureau in America. In addition to a D& B business report, you may also want to pull a company’s Prospectus if they’re publicly traded. You should also check out information on their reputations when it comes to their customers. What do people say about them on Yelp? Have they had any Better Business Bureau or other complaints? Is the company viewed favorably in the media, or have they been plagued with mismanagement and scandals? These aspects can tell you more about the health of a business than financials can. You’ll be able to tell if a business is in trouble by taking the time to check these out.
Credit Application Form
If your business extends credit to customers, you should become very familiar with consumer credit laws and privacy laws. Do not ask any questions that could be leading or ask questions about race, gender, etc. There are many laws in place that prohibit discrimination based on these attributes.
In America, the Federal Trade Commission (FTC) enforces the nation’s consumer protection laws, and the Consumer Financial Bureau goes after lenders with deceptive practices by making lawsuits and collecting money for those who fall victim to lending scams. Learn the laws about how you advertise interest rates. You’ll also need to know how much time you have to respond to billing disputes, your options when collecting debt, and other aspects of extending credit. You may need a lawyer to go over any credit application form templates and let you know what you information you can, and cannot, ask consumers when collecting information for credit-extending purposes.
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Credit Application Form 40
More On Extending Credit and Credit Application Form Templates
When you extend credit to an individual or business, you’ll want to make sure you get a good idea of their background and history when it comes to paying debt. Sometimes a consumer will get in over their head and have trouble paying. Other times, they will refuse to pay a debt based on what they believe are unfair or predatory practices.
What happens when a customer refuses to pay a bill? When you’ve added in payment penalties and sent a sequence of reminder letters, you may decide that your customer has no intention to pay. Check with your local consumer protection agencies to understand your collection options and pay special attention to local laws. Depending on your local laws, and the amount of the outstanding debt, you may decide that handing a delinquent account over to a debt collector isn’t worth the cost. For a smaller debt, such as a credit card under $500, you may find that your company will benefit best from simply writing off the bad debt in your taxes.
When it comes to losing money on credit you’ve extended, the best way to handle this is to make sure that your credit application form is through and the financial backgrounds of those you extend credit to have been thoroughly vetted. The best way to solve bad debt problems is to prevent them from occurring in the first place. Make sure you adopt strict credit policies. Conduct thorough evaluations of all credit risks before extending any credit to your customers. You’ll be glad you did!
You can download several credit application form templates on this page. Make sure you read each of them to get an idea of what your needs may be. Speak to your lawyer if you have any questions or concerns about the information you’re collecting and how it should be handled.
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|Forms-Elite & Labels C.C.|
Registration No. 2008/043539/23 VAT 4260111804
VAT REG. NO. 4260111804
P O BOX 1851
VAT REG. NO. 4260111804
O BOX 1851
(031) 701 5505
(031) 701 7552
FOR CREDIT FACILITIES
CHOOSE RELEVANT COMPANY:
REGISTERED NAME OF COMPANY:
NAME/S OF BUSINESS:
ADDRESS OF BUSINESS:
/ DELIVERY ADDRESS OF BUSINESS:
ADDRESS OF BUSINESS:
& ADDRESSES OF DIRECTORS/MEMBERS/PARTNERS/PROPRIETORS:
NO./DATE OF BIRTH
NAME OF BUSINESS:
OF HOLDING COMPANY:
OF SUBSIDIARY AND ASSOCIATE COMPANIES:
OF LANDLORD IF RENTED:
REFERENCES (PLEASE SUPPLY):
& CONDITIONS OF SALE:
| 1) |
These terms and conditions override and supersede all other conditions and
are without prejudice to any securities and/or guarantees which the seller
(b) This contract constitutes the entire contract between the parties and
no representation by any person or variations or consensual cancellations
of or amendments to any of the terms and conditions hereof shall be valid
or binding on the Supplier unless reduced to writing and signed by an authorised
representative of the Supplier.
(c) To the extent that there is any conflict between these terms and a written
agreement between the Supplier and the Purchaser in respect of a particular
transaction, the terms of that Agreement will prevail.
2) ESTIMATES, QUOTATIONS AND PROOFS
(a) Estimates and Quotations not accepted within THIRTY DAYS thereof
shall be deemed withdrawn and cancelled. Customer shall pay for any Preliminary
work which is produced at his request whether experimentally or otherwise.
(b) Proofs, pulls samples, specimens, sketches, photographs or any representation,
whether partial or total, of the finished article in whatever form may be
submitted to the customer for approval. After approval the customer shall
have no claim against the supplier for errors in the proofs as approved
by him. Changes required by customer, other than the correction of suppliers
errors, may be charged for in particular if the customer requires for any
reason a reprint of any order of which he has previously approved which
reprint includes any change or alteration of any kind to the order, then
such reprint shall be for the account of the customer notwithstanding any
claims that the customer may make about the original order.
3) CUSTOMER’S PROPERTY:
Customer’s property and property supplied to the supplier on behalf of a
customer will be held at customer’s risk The supplier will not be responsible
for imperfect work caused by defects in or unsuitability of material or
equipment not supplied by the supplier. The supplier will not be responsible
for customer’s material wasted in the course of production. Extra costs
incurred through the use of defective materials or equipment supplied are
for the customer’s account.
(a) The supplier shall not be required to produce any matter which in his
opinion is illegal or Defamatory, The customer shall indemnify the supplier
against any claims, costs and expenses arising out of infringement of copyright,
trade marks, patent or design.
(b) The supplier may recover from the customer any increase in cost of production
which occurs between the acceptance and execution of any order.
(c) The supplier shall not be required to work to tolerances closer than
those applicable to the materials obtained by him in the ordinary course
0, trade No liability shall arise from variations in the standard, quality
and performance of such materials.
(d) It is the sole responsibility of the customer to determine whether the
goods ordered by him are suitable for the purpose for which he intends using
them. The supplier gives no warranty, express or implied, concerning the
suitability of the goods supplied for any purpose whatever
(e) When required to Expedite Delivery ahead of the time needed for proper
production the supplier shall not be liable for defects occasioned thereby.
Should such delivery require payment of overtime wages, and other additional
costs or delivery charges, all such extras are for the customer’s account.
(f) Complaints, Claims and goods returned:
(i) Complaints and claims will only be entertained if received by the supplier
in writing within THIRTY DAYS of delivery.
(ii) No goods returned for credit or exchange will be accepted unless returned
within 30 days of date of delivery, and unless the invoice number is quoted.
(iii) There will be a 10% handling charge on all goods returned.
(g) Standing matter and Supplier’s materials of any kind whatever, may be
distributed, effaced or disposed of immediately after the order is executed
unless written arrangements are made for retention. The supplier may charge
rent for storage of goods retained at customer’s request. Origination work
and any copyright subsisting therein shall be the property of the supplier
unless otherwise agreed to in writing with the customer.
(h) The customer shall accept as good and complete delivery, and shall pay
the contract price pro rata for any quantity that does not exceed or fall
short of the quantity ordered by more than ten percent.
(a) The contract price shall be paid by the purchaser without any deduction
or set-off within the period stipulated on the face hereof following the
date appearing on the statement.
(b) The supplier shall be entitled to charge interest at the maximum rate
possible, from time to time on all overdue amounts, as set forth in the
"Limitation and Disclosure of Finance Charges Act No 73 of 1968",
as amended, or any other applicable legislation.
(c) The Purchaser agrees that in the event of any portion of an invoiced
indebtedness being disputed then, in that event, the Purchaser will nevertheless
forthwith pay the un-disputed amount of such indebtedness according to the
agreed terms of credit allowed to the Purchaser.
(d) When payment is overdue the supplier may suspend deliveries without
notice and without prejudice to any other legal remedy until due payment
has been made. Furthermore, any monies in respect of goods completed but
not delivered shall thereupon forthwith become due and payable Moreover
after the expiration of FOURTEEN DAYS NOTICE the supplier may exercise a
general lien on all customer’s goods and property in his hands and may dispose
of such goods and property as he sees fit and apply the proceeds towards
such debts. The supplier may also elect to cancel and not to produce any
unmade balance of such contract and recover from the customer any loss sustained
by so doing.
Our terms are strictly 30 days net as from date of statement.
(a) Delivery shall be completed when goods are off-loaded at their destination
if the goods are to be transported by means of the Supplier’s vehicle or
when the goods are loaded, if the goods are to be transported by the Purchaser
or a carrier engaged (whether by the Supplier or the Purchaser) to transport
the goods for the Purchaser.
(b) Should the Supplier at the Purchaser’s request agree to engage a carrier
to transport the goods for the Purchaser then:
(i) the Supplier is authorised to engage a carrier on such terms and conditions
as it deems fit;
(ii) the Purchaser shall indemnify the Supplier against all demands and
claims which may be made against it by the carrier so engaged and all liability
which the Supplier may incur to the carrier arising out of the transportation
(c) The risk in the goods shall pass to the Purchaser on delivery of the
goods to the Purchaser, its agent or carrier referred to in 5 (b) above.
(d) The signature of any employee or agent of the Purchaser which appears
on the Supplier’s official delivery note or waybill, or the delivery note
of any authorised independent carrier, will constitute conclusive evidence
of delivery of goods purchased.
(a) The Supplier’s liability to the Purchaser for any damages sustained
by the Purchaser from any cause whatever, including any damages arising
out of the Supplier’s negligence or that of its servants, agents or sub-contractors,
shall in any event and under all circumstances be limited to the replacement
of goods which, at the date of delivery thereof are subject to a patent
defect arising from defective materials or workmanship at the Supplier’s
(b) The Purchaser shall not have any claim of any nature whatever against
the Supplier for any failure by the Supplier to carry out any of its obligations
under the contract as a result of causes beyond the Supplier’s control,
including but without being limited to any strike, lock-out, shortage of
labour or materials, delays in transport, accidents of any kind, any default
or delay by any sub-contractor or supplier of the Supplier, or any other
cause whatever beyond the Supplier’s absolute and direct control.
(a) The Supplier may cancel the contract or any incomplete part of it if
the Purchaser commits a breach of any of the terms or conditions of the
or, being an individual dies or is provisionally or finally sequestrated
or surrenders or makes application to surrender his estate;
or, being a partnership, the partnership is terminated;
or, being a company, is placed under a provisional or final order of liquidation
or judicial management;
or, has a judgment recorded against it which remains unsatisfied for 7 days;
or, compromises or attempts to compromise generally with any of the Purchaser’s
(b) The Supplier’s rights in terms of (a) shall not be exhaustive and shall
be in addition to its common law rights
(c) Upon the cancellation of the contract for any reason whatever:
(i) all amounts then owed by the Purchaser to the Supplier in terms of the
contract shall become due and payable forthwith;
(ii) the Supplier may retake possession of goods in respect of which ownership
has not passed.
(a) The Supplier shall be entitled but not obliged to institute any proceedings
against the Purchaser, arising out of the contract for the full balance
outstanding including current purchases in any Magistrate’s Court having
jurisdiction over the Purchaser notwithstanding that the claim or the value
of the matter in dispute may exceed the jurisdiction of the Magistrate’s
(b) A certificate signed by any Director of the Supplier showing the amount
due and owing by the Purchaser to the Supplier at any given time shall be
conclusive proof of the facts therein stated for the purpose of all legal
proceedings against the Purchaser for recovery of the said amount.
The Purchaser nominates its business address as reflected on Page (i) as
its domicilium citandi et executandi for service.upon it of all notices
and processes whether in connection with any claim for any sum due to the
Supplier or otherwise.
12) NO WAIVER:
No extertsion of time or any other relaxation or indulgence granted by the
Supplier to the Purchaser shall operate as or be deemed to be a waiver by
the Supplier of any of its rights under this contract or a novation of any
of the terms and conditions of this contract
13) LAW APPLICABLE:
This colltract is governed by the laws of the Republic of South Africa.
certify that the information given is true and correct. We agree to the
terms and conditions set out
I, THE ABOVE SIGNATORY, DO HEREBY BIND MYSELF AS SURETY AND CO-PRINCIPAL
DEBTOR WITH THE CUSTOMER FOR THE DEBTS AND OBLIGATIONS OF THE CUSTOMER TO
FORMS-ELITE & LABELS C.C.. I RENOUNCE THE BENEFITS
OF DIVISION AND EXCLUSION.