Recovery problems are almost always documentation problems. A clear, signed credit application transforms a disputed obligation into a verifiable one. It tells you exactly who you are dealing with, what they have agreed to, and what recourse you have if they do not pay. Here is what a commercially sound application contains.
Legal entity and contact details
Capture the full legal name of the entity receiving credit — not just a trading name. For a company: ACN. For a partnership or sole trader: ABN plus full individual name. The registered address, the primary contact and at least one emergency or alternate contact. These details establish who you are dealing with and where demands should be sent.
Directors and principals
For a company account, collect the names and contact details of all current directors. This information underpins any personal guarantee and makes the account traceable if the company changes control or is deregistered.
Trade references
Two or three business references from existing suppliers, with contact details and permission to approach them. References do not guarantee an outcome, but they establish a payment history and confirm the business is operating.
Credit limit and payment terms
State the credit limit you are offering and the payment terms that apply — due date, whether interest applies to overdue amounts, and the basis on which terms can be changed. Both parties should sign against these figures.
Reference to your terms of trade
Attach or reference your standard terms of trade and require the applicant to acknowledge them. The signature block should confirm the applicant has read and accepted the terms — not just the credit application details. This one step makes the difference between recoverable and unenforceable.
Personal guarantee (where appropriate)
For company accounts, consider requiring a personal guarantee from at least one director. A properly executed guarantee extends recovery options to the individual if the company cannot pay. Whether a guarantee is appropriate and whether a particular form is enforceable are questions for a qualified adviser — this is just a strong practice for meaningful credit limits.
Note: guarantees are complex legal instruments. Have them reviewed by a solicitor before use.
This guide and template are general information, not legal advice. Have any guarantee or legal document reviewed by a qualified solicitor.