When a manufacturer of goods or provider of services supplies goods or services to a customer on terms that do not require the immediate payment of the agreed consideration or obliges the supplier to support the provision of the goods or services in some way with credit, the deferred part of the consideration or the support provided could be described as vendor financing. This article focuses on the supply of goods because this is the situation in which vendor financing is most commonly encountered and examines some of the techniques currently in use, the advantages and disadvantages and current trends.
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