· 6 min read
How to write a credit policy for wholesale buyers
Most merchants extend their first Net terms deal on instinct, then scramble to write a policy after the first late payment. Here's how to build one before that happens.
Define approval criteria up front
A credit policy starts with the minimum bar a buyer has to clear before they're eligible for terms at all: a verifiable business identity, a clean watchlist and sanctions check, no active bankruptcy, and — where available — a valid tax ID. Write these down as pass/fail criteria, not judgment calls, so every buyer is evaluated the same way regardless of who's reviewing the account.
Build limit bands, not a single number
Group buyers into a small number of bands — for example starter, standard, and preferred — each with its own credit ceiling. New accounts enter at the starter band regardless of how large their first order is; the band only moves up after a track record of on-time payment. This keeps early exposure small while still letting your best wholesale accounts grow their limit over time.
Put a number on payment terms, and stick to it
Decide in advance which terms — Net 15, 30, or 60 — map to which band, and what happens on a late payment: a grace period, a hold on new orders, or a downgrade to a lower band. Buyers respond to consistency, and a documented policy is also what you'll want on hand if a dispute ever needs to be resolved.
Review the policy, not just the buyers
Set a quarterly cadence to check whether the policy itself is still working — are limits too conservative to compete, or too generous given your default rate? Treat the policy as a living document that adjusts with what you're actually seeing in payment behavior.
SafeNet30 applies your credit bands automatically at checkout. Install the app to set yours up.