is trade credit expensive 
in its purest form trade credit is not expensive to the buyer as there is no associated cost trade credit is an interest free loan however trade credit can be expensive if payment is not made by the agreed upon date whereby a borrower can incur high costs either through late fees or an interest rate charged by the seller on the outstanding amount the bottom linetrade credit is a form of commercial financing that greatly benefits businesses in their operations it is an interest free loan for a buyer allowing them to obtain goods with payment due at a later date at no extra charge this allows for improved cash flows and the avoidance of traditional costs associated with financing 