Credit application: business credit application form, template and how to review one
A credit application is the form a business customer fills in before a supplier lets them buy now and pay later. It tells you who the customer legally is, who pays their bills, how they have paid other suppliers, and how much credit they are asking for — and, once signed, it records that they accepted your payment terms. For a small supplier it is the cheapest protection there is: one page, filled in once, before the first invoice on account. Below: what a business credit application should include, a filled-in example, the terms you may want on it, how to review one, approval and denial wording, and how to keep each approved customer inside their limit — including in Account Ledger by Ofisx.
Short answer
- Credit application meaning: a form a customer completes to ask a supplier for credit — to receive goods or services now and pay by an agreed due date, such as Net 30.
- Business credit application: the version used between businesses (B2B). It asks for the legal business name, entity type, EIN, addresses, accounts-payable contact, bank and trade references, requested limit, and a signature accepting your terms.
- Who fills it in: the customer. The supplier reviews it, sets a credit limit and payment terms, and approves, approves with a lower limit, asks for a deposit or guarantee, or declines.
- Why it matters: it gives you the correct legal name and address if you ever have to send a demand letter or file a claim, and the signed terms make late fees, collection costs and the due date enforceable as agreed.
- After approval: record the limit and terms on the customer's account and watch the running balance against them every week.
What a business credit application form should include
Most credit application templates use the same blocks. Keep yours to one or two pages — a long form gets abandoned, and you will not read the extra answers anyway.
| Section | Fields | Why you need it |
|---|---|---|
| Business information | Legal business name, DBA (trade name), entity type (LLC, corporation, sole proprietor, partnership), state of incorporation, EIN, years in business | The legal name is who you can actually collect from; a DBA alone is not enough |
| Addresses | Billing address, delivery/job-site address, phone, website | Where invoices and any demand letter go |
| Owners or officers | Names, titles, and for small companies the owner's home address | Who signs and who to contact if the business stops answering |
| Accounts-payable contact | Name, email and phone of whoever pays invoices; how they want invoices sent | Reminders go to the person who pays, not the person who orders |
| Credit requested | Requested credit limit, expected monthly purchases, requested terms (for example Net 30) | The starting point for your decision |
| Bank reference | Bank name, branch, contact, account type (no full account numbers needed) | Confirms an operating account exists |
| Trade references | Two or three suppliers that already give them credit: company, contact, phone, email | The best predictor of how they will pay you |
| Tax status | Resale or exemption certificate if they buy tax-free | You need it on file before selling tax-exempt |
| Terms and conditions | Payment terms, late fee, collection costs, returns, venue — accepted by signature | Makes the terms part of the agreement |
| Authorization | Permission to contact references and, if you will use them, obtain business or personal credit reports | You should have written permission before pulling reports |
| Personal guarantee (optional) | Separate signed section where an owner personally guarantees the account | Gives you a person to pursue if the company closes |
| Signature and date | Name, title, signature, date | Shows an authorized person accepted the terms |
Credit application example (filled in)
Here is how a completed business credit application might look for a small building-supply store. The names are invented.
| Field | Answer |
|---|---|
| Supplier | Northside Building Supply |
| Legal business name / DBA | Maple Street Remodeling LLC / "Maple Street Remodeling" |
| Entity type, state, years in business | LLC, Ohio, 4 years |
| EIN | On file (not shown here) |
| Billing address | 214 Maple St, Columbus, OH |
| Accounts-payable contact | Dana Ruiz, office manager — ap@maplestreet.example, (614) 555-0142; invoices by email |
| Owner | Chris Lane, managing member |
| Credit requested | $5,000 limit, Net 30; expected purchases about $3,500 a month |
| Bank reference | Local credit union, business checking, contact: branch manager |
| Trade references | 1) Lumber yard, account since 2023, Net 30 2) Paint distributor, account since 2024, Net 15 |
| Tax status | Not tax-exempt |
| Personal guarantee | Signed by Chris Lane |
| Signed | Chris Lane, Managing Member, October 21, 2026 |
How to review a credit application (the five Cs, small-business version)
Banks use the "five Cs of credit". A small supplier can use the same idea in about fifteen minutes per application:
- Character — how do they pay others? Call the trade references and ask four questions: how long have they had an account, what is the credit limit, what are the terms, and do they pay on time or late (and how late). A reference who says "they pay, eventually" is telling you something.
- Capacity — can they pay this much? Compare the requested limit with the size of the business. A four-year-old remodeler asking for $5,000 is ordinary; a brand-new company asking for $50,000 is not.
- Capital — is there anything behind the business? Years in business, a real operating bank account, and for larger requests financial statements.
- Collateral — is there security? For small trade accounts the usual "security" is a personal guarantee or a deposit rather than collateral.
- Conditions — what is the risk in this job or industry? Construction, seasonal and project-based customers often pay when *their* customer pays them; shorter terms or a lower starting limit may fit better.
- Decide: approve, approve a lower starting limit, ask for a deposit or guarantee, offer cash or card only for now, or decline. Write the decision, limit, terms and review date on the application.
Example decision and approval letter
For Maple Street Remodeling, both references said they pay within terms; the lumber yard gives them $4,000 on Net 30. A reasonable decision: approve $3,000 on Net 30, review after 90 days, with the option to raise the limit to $5,000 after three months of on-time payment.
A short credit approval letter or email:
*"Dear Chris, thank you for your credit application. We are pleased to open an account for Maple Street Remodeling LLC with a credit limit of $3,000 on Net 30 terms, effective October 21, 2026. Invoices will be emailed to ap@maplestreet.example. We will review the limit after three months. Our payment terms and conditions are attached. — Accounts receivable, Northside Building Supply"*
If you decline or offer less than requested, say so in writing too. In the US, the Equal Credit Opportunity Act (ECOA) and Regulation B also apply to business credit: you must not decide based on race, color, religion, national origin, sex, marital status or age, and applicants are generally entitled to notice of the decision and the reasons (or of their right to ask for them). The exact notice rules depend on the applicant's size and the type of credit, so have an attorney check your wording.
Terms and conditions to consider on a credit application
These are the clauses small suppliers most often put above the signature line. Laws differ by state — use this as a checklist for your attorney, not as wording to copy.
- Payment terms: "Invoices are due Net 30 from the invoice date." (See payment terms and Net 30.)
- Late fee or interest: a stated rate on overdue balances, within your state's legal limits.
- Collection costs: that the customer pays reasonable collection and attorney fees if the account goes to collection.
- Credit limit and hold: that you may change the limit or hold orders when the account is past due.
- Returns and disputes: how many days the customer has to report a short shipment or a billing error.
- Governing law and venue: which state's law applies and where a dispute would be heard.
- Change of ownership: that the customer must tell you if the business is sold or changes legal form.
- Personal guarantee: a separate, clearly labeled section the owner signs as an individual.
After approval: keeping each customer inside their limit
The credit application is only useful if someone looks at the account afterwards. A weekly check of each credit customer's running balance against the limit and the oldest unpaid invoice catches most problems early.
| Date | Entry | Amount | Balance | Limit check |
|---|---|---|---|---|
| Oct 23 | Sale on account — INV-2301, due Nov 22 | $1,240 | $1,240 | Within $3,000 |
| Nov 4 | Sale on account — INV-2318, due Dec 4 | $1,610 | $2,850 | Close to limit |
| Nov 20 | Payment received — INV-2301 (check 1088) | −$1,240 | $1,610 | Within limit |
| Nov 27 | Sale on account — INV-2342, due Dec 27 | $980 | $2,590 | Within limit |
| Dec 8 | INV-2318 now 4 days past due | — | $2,590 | Send a payment reminder; hold new orders if it reaches 15 days |
- Write the approved limit and terms in the customer's note so whoever takes the next order can see them.
- Re-check the limit after 90 days and once a year, or when order sizes change.
- If an invoice goes unpaid well past the due date, follow the steps in unpaid invoice: what to do.
Ways to track approved credit customers compared
| Option | Best for | Customer balance vs limit | Due dates and reminders | Platforms | US App Store ratings (Oct 21, 2026) |
|---|---|---|---|---|---|
| Account Ledger by Ofisx | Small suppliers that approve a few credit customers and need to watch their balances | Running balance per customer; agreed limit kept in the customer's note | Due date on each sale on account; alerts for upcoming and overdue amounts; WhatsApp balance reminder sent by you | iPhone (US App Store); Android on Google Play in Turkey only | New in the US store — no ratings yet |
| Intuit QuickBooks | Businesses that invoice every sale in QuickBooks | Customer balances and A/R aging | Payment terms on invoices; email reminders | iPhone, Android, web | 273,010 ratings, 4.7 |
| Zoho Books | Small businesses invoicing in Zoho | Customer balances and aging | Payment terms on invoices; reminders; statements | iPhone, Android, web | 5,264 ratings, 4.8 |
| Wave | Very small businesses that invoice in Wave | Customer balances from Wave invoices | Due dates on invoices; overdue reminders | iPhone, Android, web | 6,665 ratings, 4.4 |
| Paper or PDF form plus a spreadsheet | A handful of credit customers | A limit column next to SUMIFS of each customer's balance | Due date column and a filter | Any | — |
The options in detail
Account Ledger by Ofisx
Account Ledger keeps a ledger for each customer and supplier — sales and purchases on credit with a due date, payments, partial payments and returns — and shows each running balance. Due-date alerts flag what is coming due or overdue; from the customer's card you can send the balance by WhatsApp or share the ledger as a PDF statement.
It does not host online credit application forms, run credit checks or e-signatures, or issue invoices. A credit limit is not a built-in field we can confirm — keep the agreed limit and terms in the customer's note and compare it with the balance.
Intuit QuickBooks
QuickBooks manages payment terms, customer balances and receivables inside full accounting.
Zoho Books
Zoho Books supports payment terms, reminders and customer statements in full accounting.
Wave
Wave combines invoicing and bookkeeping for very small businesses.
Paper or PDF form plus a spreadsheet
A signed PDF credit application in a folder and a sheet with customer, limit, sales, payments and due dates works for a few accounts; it gets fragile with partial payments and several people editing.
Credit application rules that prevent bad debt
- No application, no account — Get the signed form before the first sale on account, not after the first late payment.
- Use the legal name — Invoice and record the account under the legal entity on the application, not only the trade name.
- Call the references — Two phone calls tell you more than any score.
- Start lower than requested — Raise the limit after three months of on-time payments.
- Put the limit where orders are taken — A limit that only lives in a filing cabinet is never enforced.
- Have a hold rule — For example: no new orders on account when an invoice is 15 days past due or the balance exceeds the limit.
Limits — what Account Ledger does not do
- Account Ledger does not create or host credit application forms, collect e-signatures, run credit checks or issue invoices.
- A credit limit field is not something we can confirm; keep the limit in the customer's note.
- In the US the app is on the App Store for iPhone; the Android version is on Google Play in Turkey only for now.
- It is a paid subscription after the free trial; the App Store shows current plans and prices.
Frequently asked questions
What is a credit application?
A credit application is a form a customer completes to ask a supplier or lender for credit. In business-to-business trade it lets the customer receive goods or services now and pay later on agreed terms, such as Net 30, up to a credit limit.
What should a business credit application include?
The legal business name and DBA, entity type, EIN, years in business, billing and delivery addresses, owner and accounts-payable contacts, requested credit limit and terms, a bank reference, two or three trade references, tax-exempt status, your terms and conditions, authorization to check references and credit, an optional personal guarantee, and a dated signature.
How do I review a business credit application?
Check that the legal name and entity are real, call the trade references (how long, what limit, what terms, do they pay on time), compare the requested limit with the size of the business, decide on a starting limit and terms, and write the decision and a review date on the application.
Should I ask for a personal guarantee?
Many small suppliers ask for one from owners of small or new companies, because if the company closes the guarantee gives you a person to collect from. It should be a separate, clearly labeled section signed by the owner as an individual. Ask an attorney about the wording in your state.
Do I have to tell a business why its credit application was declined?
In the US, the Equal Credit Opportunity Act and Regulation B apply to business credit, and applicants are generally entitled to notice of the decision and the reasons or of their right to request them; the details depend on the applicant's size and the type of credit. Check the current rules with an attorney.
What credit limit should I give a new customer?
A common approach is to start with one or two typical orders — for example the amount they expect to buy in a month — and raise it after a few months of on-time payments. Lower it, or ask for a deposit, if references report late payment.
Is there an app to track customers after their credit application is approved?
Yes. Account Ledger by Ofisx (iPhone, US App Store) keeps a ledger for each customer with sales on account, due dates, payments and a running balance, alerts you to upcoming and overdue amounts, and lets you send the balance by WhatsApp or as a PDF statement. It does not host application forms or run credit checks. It is a paid subscription after a free trial.