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Guide · Free checklist

How to set up a credit application form.

Before you give a customer 30 days to pay, get a signed credit application. It tells you who you’re dealing with, locks in your terms, and makes recovery far easier if they stop paying.

By Kyle Zorger, founder of ARS Financial · Updated · 6 min read

In short

  • Use a credit application for every customer you let pay later, not just big ones.
  • Capture the legal entity: registered name, registration number, VAT number and directors.
  • Ask for trade references and consent to run credit checks.
  • Attach your terms: payment terms, interest on late payment, ownership of goods until paid, and collection costs.
  • For companies, have the directors sign a personal suretyship. It must be in writing to be valid.

Why you need one

Most bad debts start with a customer who was given credit on a handshake. A signed credit application means you know exactly which legal entity owes you, the customer has agreed to your terms in writing, and you have someone to hold personally liable if the business can’t pay.

Credit application checklist

Copy this into your own form. Have an attorney check your terms and suretyship wording before you use it.

Template
CUSTOMER DETAILS Registered name of the business: Trading name: Registration number: VAT number: Type of entity (company, close corporation, sole proprietor, partnership, trust): Physical address: Postal address: Address for legal notices (domicilium): Directors / members / owners (full names and ID numbers): Accounts contact (name, phone, email): How long has the business been trading? CREDIT REQUESTED Credit limit requested: R Payment terms requested: BANK DETAILS Bank, branch, account name and account number: TRADE REFERENCES (at least two current suppliers) Supplier name, contact person, phone number: CONSENT TO CREDIT CHECKS We consent to [your business] obtaining credit reports on this business and on its directors who sign surety, and to sharing payment information with credit bureaus. TERMS AND CONDITIONS (attach in full) Payment terms, and what happens when payment is late Interest on overdue amounts, and the rate Ownership of goods stays with [your business] until paid in full Collection and legal costs, if the account is handed over Consent to the jurisdiction of the magistrates’ court Address for legal notices SURETYSHIP Signed by each director in their personal capacity, binding them as surety and co-principal debtor for the business’s debts to [your business]. SIGNATURES Signed by an authorised representative, with full name, capacity, date and place.

Terms worth including

  • Payment terms: when payment is due, stated clearly, with the right to stop supply on overdue accounts.
  • Interest on overdue amounts: at a stated rate. Without an agreed rate, you’re generally limited to the prescribed rate.
  • Reservation of ownership: goods remain yours until they’re paid for in full.
  • Collection costs: that the customer pays the costs of recovering an overdue account, if it’s handed over.
  • Jurisdiction: consent to the magistrates’ court, which is usually quicker and cheaper than the High Court.
  • A certificate of balance: that a certificate signed by you is proof of the amount owing, unless the customer proves otherwise.

If your customers include individuals or small businesses, the National Credit Act may limit what you can charge, so take advice on those clauses.

Suretyship: your safety net

A company or close corporation is a separate legal person. If it closes or is liquidated, you can’t generally go after its directors for its debts. A suretyship changes that: each director agrees in writing to be personally liable if the business doesn’t pay. Under South African law, a suretyship is only valid if it’s in writing and signed by the surety, so make it part of the form.

Using it properly

  • Check the details before approving credit: see our guide on checking a business before you give it credit.
  • Start with a modest credit limit and increase it as the customer pays on time.
  • Keep the signed original on file, and update it if the business changes owners or directors.
  • Handle the personal information on the form in line with POPIA: tell the customer why you’re collecting it, and keep it secure.

Frequently asked questions

Yes, for anyone you let pay after delivery. It takes a few minutes to complete and gives you far more protection if an account goes bad.

Yes, if it’s in writing, signed by the surety, and clearly identifies the debt it covers. Have an attorney check the wording.

Yes, with their consent. Include a consent clause in your credit application covering the business and the directors who sign surety.

Then don’t give them credit. Ask for payment upfront or on delivery until they’re willing to sign.

Hand us the invoice. We’ll take it from here.

No recovery, no fee, and a live view of every step in your client portal. Based in Cape Town, working nationwide.

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