We have been a cash business for some years now, I would like to know if we want to go into Higher purchase or terms business in terms of selling our products what’s the procedure and legal processes?

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Isaac_Fenyane
Posted 1 month ago

You will need to register with the National Credit Regulator as a credit provider (see the form at http://www.ncr.org.za/pdfs/Form%202.pdf) a fee of R500 is payable per registration. You will also need to consult an attorney to assist with preparing a standard contracts which you will use when you sell goods on credit. The attorney will ensure that the contracts are compliant with the National Credit Act and the Consumer Protection Act and other applicable laws. The attorney will also be able to assess whether you actually need to apply for registration as a credit provider as there are certain exemptions (for example, you need not register as a credit provider if you have fewer than 100 agreements, or a total outstanding book of credit equal to or less than R500 000) and will further advise you of other legal rights and responsibilities as a credit provider.

Gavin_Tonks_facebook
Posted 1 month ago

You first need to build a financial model and plan to see how credit will impact on the business and how much cash sales you will loose as you are looking at growing sales, not replacing existing cash business with credit. When loyal cash customers convert to credit and do not pay what then?



reeves.graham
Posted 4 weeks ago

I would seriously consider outsourcing your credit facilities to credit experts. Companies like RCS and Real People Merchant Finance specialise in credit, including the credit scoring granting of credit to your customer and collection thereof. In my experience, small businesses who start providing credit have to learn steep lessons, and if not done correctly, can place enormous strain on the business causing one to lose site of the most important thing…. Sales! My vote is outsource your credit.

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