What is the difference between trade credit and bank credit?

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Solution

Bank credits: are the funds issued for a short-term purpose and for a medium-term purpose.

Trade credit: these are the funds lent between business to business for buying goods and services from one business and paying on a later date.

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Explain trade credit and bank credit as sources of short-term finance for business enterprises.

Explain trade credit and bank credit as sources of short term finance for business enterprises.

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