Lending is the process of a business or lender providing goods, services or money in exchange for payment at a later date. It is a widespread practice in the retail, service and corporate sectors and serves as an important part of the economy - especially in terms of liquidity and growth.
Who provides credit - and when?
Credit is granted in far more situations than many people realize. When a company sends an invoice with a 14-day payment term, this is actually credit. The same is true when a DIY store sells materials to a tradesman or when a wholesaler delivers goods to a café with 30-day payment terms.
In addition, banks and financial institutions provide credit in the form of e.g. operating credits, overdrafts or leasing agreements. Regardless of the type, all credit providers have the same basic goal: to secure payment and minimize losses.
Why is credit important for businesses?
Credit can be a strategic advantage. It gives customers flexibility and allows them to act without the need for same-day liquidity. For the supplier, this can mean more orders, better customer retention - and in some industries, a real competitive advantage.
Example: A carpenter who receives a 30-day credit on building materials can invoice his customer and receive payment before the invoice from the supplier is due. This creates strong liquidity, even in a business with limited capital.
What does it take to extend credit?
Granting credit is not only about trust - it also requires a good process. A professional credit granting process often starts with an assessment of the customer's ability to pay. This can include:
- Kreditopslag og økonomiske analyser
- Obtaining accounting information
- Assess payment history and industry data
The better the data, the better the chance of giving credit to the right customers and avoiding losses.
What are the risks associated with credit?
Lending always involves a degree of uncertainty. Even healthy businesses can run into financial problems and private customers can lose income or go bankrupt. That's why it's important to have clear credit guidelines - both in terms of amount, maturity and follow-up.
Effective credit management is not about avoiding all risk, but about balancing potential and risk on an informed basis.
Use Qatchr for smarter lending
Qatchr er en digital platform, der gør det nemt og hurtigt at vurdere, om dine kunder er egnede til at få kredit. Ved at kombinere offentlige data, regnskaber og betalingsadfærd kan du:
- Foretage kreditopslag: søg efter både virksomheder og privatpersoner
- Get recommendations for credit limits and payment terms
- Monitor changes in your customers' financial situation
Qatchr helps you make safe and data-driven decisions - and extend credit with greater confidence.
