Vendor Credit
From Open Risk Manual
Definition
Vendor Credit. It is a financing arranged by a vendor with or without a finance provider to enable it to provide credit terms to a buyer of its products or services. Normally the buyer pays a portion of the contract value in cash and issues a promissory note or accepts a draft as evidence of its obligation to pay the balance over a period of time. The vendor thus accepts a deferred payment from the buyer. It may be able to obtain cash payment by discounting or selling the draft or promissory notes created with its financial institution.
