Vision Business Products (VBP), a Carnegie, Pa.-based IT solutions provider, never wants to leave revenue on the table with certain projects. When a longstanding customer entering a period of rapid growth requested a significant credit limit increase from $200,000 to $600,000, VBP faced a crucial decision. Such situations are not unusual in VBP’s business. The company is a project-driven business that regularly works with start-up and enterprise companies in need of large credit limits, which expose the company to substantial nonpayment risks.
“If we denied the credit request in this case, we would have lost a major five-year-old account and a significant revenue opportunity,” said Jeff Woolley, the company’s general manager. The decision was not clear cut. While the customer had a solid track record of on-time payments, VBP felt that the customer had a weak balance sheet. “We knew it would be risky to increase the credit line past $200,000,” he said.