Trade Reference Request Template
Calling a new customer's existing suppliers is the fastest, cheapest credit check you can run — this template gives you the exact questions to ask so the answers are actually useful.
What's included
- A phone/email script for contacting trade referees
- The specific questions that reveal real payment behaviour
- A form to record each reference
- How to read between the lines of a guarded answer
6 min read
Why references beat gut feel
A trade reference tells you how a customer actually pays the suppliers it already deals with — not how it presents on an application. Two or three honest references can reveal slow payment, disputes or stop-supply history long before you are exposed. The catch is that vague questions get vague answers, so ask specifics.
Use the script and form below for every reference. Beware references that are clearly related parties — ask whether the referee is an arm's-length supplier.
The reference request script and form
Identify yourself, explain the customer has applied for credit, and ask:
- How long has [Customer] been an account customer of yours?
- What credit limit do they hold with you?
- What are your payment terms, and do they pay to terms?
- What is their typical days-to-pay?
- Have you ever placed them on stop or had a dispute?
- Would you continue extending them credit?
Record the answers:
- Referee business / contact
- __________ Phone: ______
- Arm's-length supplier?
- [ ] Yes [ ] No
- Length of relationship
- ______ Limit: $______
- Pays to terms?
- [ ] Yes [ ] No Typical days to pay: ______
- Stops/disputes
- __________________________________
- Would extend credit again?
- [ ] Yes [ ] No Notes: ______
How to use it
Run this for at least two references on every new credit account, and three for larger limits. A referee who hesitates on 'would you extend credit again?' is telling you something even if the words are polite — note the tone. Feed the results into your credit check checklist before approving.
If references raise red flags, start the account small or cash-up-front. You can always sense-check exposure with the Merion tools before committing to a limit.
This is general business information, not legal advice.
Tips
- Ask specific questions — days-to-pay and stop history — not just 'are they good?'
- Confirm the referee is an arm's-length supplier, not a related party.
- A hesitant 'would you extend credit again?' is a warning regardless of wording.
- Record every reference so the file shows the account was checked.
FAQ
How many references should I call?
Two as a minimum, three for larger limits. Quality matters more than quantity — genuine arm's-length suppliers only.
What if a customer only gives related-party references?
Treat that as a red flag and ask for genuine third-party suppliers, or rely more on a formal credit check.
Can I email references instead of calling?
You can, but a phone call captures tone and hesitation that a written reply hides. Call where you can.
Templates are a head start — not legal advice
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