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How to Request Financial Statements of Commercial Customers Ordering on Credit

Commercial credit is a preapproved sum of money issued by suppliers to companies seeking to establish an open-ended, continuous business relationship with their suppliers. Widespread and commonplace, commercial credit is used to fund everyday operations, can be accessed by the borrower at any point, and is usually repaid within common terms like “Net 30.” Like any loan, commercial credit comes with an element of risk, but with research and verification, the risk can be significantly mitigated. However, this requires asking some probing questions.

Request financial information

When an existing client or repeat customer requests a noticeable increase in orders, it is not improper to request a current financial statement to justify shipment. However, when the prospective customer is unknown or — for whatever reason — seems questionable, the supplier must ask specific questions to ascertain and evaluate pertinent information. Items to investigate include the following:

  • Learning the company’s commercial credit history
  • Evaluating the health of the business
  • Evaluating payment patterns

While it can be awkward writing a letter that asks a prospective lendee for credit information, it is critically important to understand the key structures of a business to which your company is considering extending credit. In fact, it can be the difference between success and failure.

As a general rule, the larger the sum being requested, the more checks and diligence will be required.

The following letters demonstrate how lenders can remain professional, approachable, and effective in a written request for financial information in support of a commercial credit application.

Letter to existing customer

You can use the following letter as a template for asking existing customers to update their financial information.

Dear Customer,

Thank you for your recent order. It is currently being processed. We’re excited about the growth of your business. In addition, we appreciate your continued interest in our [products/services].

Due to the increased volume of your recent order, we are asking you to provide us with a current balance sheet or operating statement. Your most recent financial information that we have on file is dated 2019. This is a routine credit procedure for our company to update credit customers’ information when increased orders are placed, or when orders resume after a period of inactivity.

We appreciate your timely cooperation in providing us with the necessary financial information so that we can promptly meet your needs. Please be assured that any financial information you send us will remain strictly confidential. If you have any questions, please reach out to us.

Letter to new customer

You can use the following letter as a template for asking new customers to supply their financial information.

Dear Customer,

Thank you for your recent order. It is currently being processed. We appreciate your business, and we are eager to add your company to our list of customers who receive open credit terms.

We are asking you to provide us with a complete (certified) financial statement. Please send this information directly to us at [fax/address]. If you prefer, you can use the enclosed form.

We appreciate your timely cooperation in providing us with the necessary financial information so that we can ship your order as soon as possible. Please be assured that any financial information you send us will remain strictly confidential. If you have any questions, please reach out to us.

Be proactive

Commercial credit is here to stay, but there are ways to remain in control of the situation while reaping the benefits of a positive relationship. By employing a diligent and robust vetting process supported by intelligent, probing questions, your company will be equipped with the tools — as well as the peace of mind — necessary for selecting candidates for commercial credit terms. And often it starts with a smartly worded letter.

End-of-year charge-offs or cleanup? We can help! Contact us for ideas! Please call us at 800-457-8244 or 303-806-5300, fax us at 303-806-5360, or send a request through our website.