Functions of Credit to the Retailer and Wholesaler

Functions of Credit to the wholesaler

1. They are used to acquire assets required for the wholesalers’ business.
2. They are used to finance the production of the goods sold by the wholesaler.
3. They are used to expand the business.
4. The wholesaler needs to finance his business since he also grants credit facilities to the manufacturer and the retailer as well.
5. The wholesaler buys goods in bulk; he may not afford to do that with the limited resources within his reach.
6. They help the wholesaler to buy goods in bulk whenever he anticipates a likely rise in the price of goods.

Functions of Credit to the Retailer

1. They are used in acquiring assets and facilities needed for the retailer’s business.
2. They help the retailer to finance his business, particularly in buying goods from the wholesaler.
3. A retailer obtains credit in order to buy goods at low costs with the aim of maximizing profit.