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Unit 15 - help

ktjadektjade Just JoinedRegistered Posts: 2
Hi,

Sitting my unit 15 skills test, one question I have come across I cannot find an answer to anywhere in my books (i'm home study):

'What are 3 factors to consider when granting credit and explain these factors.'

I was wondering if anyone could help with this, does it mean internal and external references etc. or customers status and risk level?

Any help would be much appreciated.

Thanks.
xx

Comments

  • sdvsdv Experienced Mentor Registered Posts: 585
    ktjade wrote: »

    'What are 3 factors to consider when granting credit and explain these factors.'

    xx


    There are seven. CAMPARI

    Character of the customer
    Ability to pay
    Margin
    Purpose of borrowing
    Amount of borrowing
    Repayment terms
    Insurance against non payment

    Take your pick. But I would say the 3 main ones would be

    Ability to pay (link it to gross/net profit margin, and payable days)
    Amount of Credit
    Terms of Credit


    I am sure you can easily explain the above factors
  • ktjadektjade Just Joined Registered Posts: 2
    Thank you so much - that is a great help :)
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