The level and terms of trade credit are heavily influenced by the nature of the buyer-supplier relationship (BSR):
: Relationships often progress through three stages: negotiation, commitment, and execution. Trade credit acts as a "generative mechanism" that helps parties advance through these stages by demonstrating reliability. Strategic Motivations buyer-supplier relationships and trade credit
Both parties use trade credit for specific operational and financial reasons: The level and terms of trade credit are
: Long-term, stable relationships typically result in more accessible and favorable credit terms . buyer-supplier relationships and trade credit