1.

Advantages of Trade credit

· Reduced capital requirements, this means that if a new business setting up
has trade credit, they will obviously require less money in capital to start up
the business. This is a major advantage to someone who has very little money
but has a good idea about starting a new business. 
· Trade credit with improve the cash flows and therefore provide smoother
operation for the business
· Businesses can buy now and pay later which means even if they don't have
the money at first they can purchase items, sell them as a business and then
make the payments at the end of the month when the products have been
sold and a profit has been made. 
· Businesses can look to grow without having to worry of needing to make
immediate payments which may set them back.
· With trade credit, the business can focus on other areas such as sales,
marketing and research rather than worrying about meeting targets just to
have enough money to pay the bills.