Credit applications: what goes on the form, and why it matters

A credit application, or account application, is the form a customer signs before you supply them on account. It records exactly who you are dealing with: the legal entity, its directors and who is signing. It ties them to your terms of trade, and gives you their agreement to a credit check.

What is a credit application?

When a customer holds an account with you, they take the work now and pay you later, using your funds to pay for the job until it is finished and they pay you. That is credit. You are providing it, even if you don’t call it that.

Think about your own trade supply accounts. Chances are you had to fill in some kind of account form before your supplier would let you take the goods now and pay later. A credit application is the same form, the other way around. You will also see it called an account application, a credit account application or a trade credit application. They all do the same job.

What goes on a credit application form

Most businesses want the full legal details and trading details of the business, the director’s information and the contact details. A good form fits on one page and asks for:

• The type of entity. An individual, a sole trader, a partnership, a company or a trust.
• The full legal name, and the company number or New Zealand Business Number (NZBN). Then the trading name, if it is different.
• The directors, or the partners or trustees, and who looks after the account.
• Addresses and contacts: physical and postal addresses, a phone number, and the email address your invoices and notices go to.
• For individuals and sole traders, full name and date of birth. That is what you need to identify them, run a credit check, and register on the PPSR. A driver’s licence number is a different matter: holding on to one, and handling it correctly, becomes a privacy responsibility of its own.
• The financial section. The credit limit they are asking for, their expected monthly spend, how long they have been in business, their bank and trade references. This is what makes it a credit application. Without it, it is just a client information form with another name on it.
• The privacy and credit check consent, and the acknowledgement that they have read and accept your terms of trade.
• The signature box, which captures the legal details of who is signing: their name, their role, and the date.

If you came here for a credit application form template, that list is the shape of one. A template can give you the layout. What makes the form work is that it matches your own terms of trade and the way your business actually runs, and that someone checks what comes back.

Ask us about your account forms

Why the legal entity has to be exact

Your terms of trade are a legal document between two entities. The name on the van, the website or the invoice is often a trading name, and the trading name is often different from the legal name. The form exists to capture the legal one. If it ever comes to not being paid, you need to know which John Smith you are talking to.

Check the name against the Companies Register before you open the account. It is free, and it confirms the company exists and that you are using its correct legal name on your terms of trade, your account application and your invoices. The Companies Act 1993 (section 25) requires a company’s name to be clearly stated on the documents that create its obligations. Sole traders, partnerships and trusts can hold an NZBN too. With a trust, the people you are dealing with are the trustees, so the form should name them.

We have seen what happens when nobody checks. One client of ours had a customer who had paid reliably for nine years. When the customer went into liquidation and we went back to the signed credit application, the legal entity written on it did not exist. We tell the whole story in early warning signs. That is the sort of tiny administrative detail that feels irrelevant when somebody has paid you perfectly for years.

Who signs, and what the signature does

The signature box binds the customer to your terms of trade, so it matters who signs it and in what capacity. For a company, that is someone with the authority to commit it, usually a director. When two or more people are the customer, or the customer is a trust, each of them signs.

Two points from the law are worth knowing. When a director signs for their company, the starting presumption is that they have signed only for the company, and not personally. If you want the director personally behind the account, that is a personal guarantee, as its own document. And under section 25 of the Companies Act, if a document creating a company’s obligation does not state its name properly, the person who signed it can be liable as well, unless you knew all along you were dealing with the company. Getting the name right protects both sides.

The courts have also shown what makes the terms stick. In one case, a business put its terms of trade on the back of its credit application and had the customer sign a declaration that they had read them. The High Court held the customer to them. In another, the terms sat on page two in a font “bordering on the microscopic”, the customer said he never saw them, and an onerous clause was held not to be part of the deal. Put your terms with the form, make the acceptance plain, and keep the signed copy.

These forms do not usually need a witness, and they can be signed electronically. New Zealand law recognises an electronic signature when it reliably identifies the person and shows they approved the document.

Credit checks and privacy

The Privacy Act 2020 covers information about people, so it does not apply to a company. You can check a company on the Companies Register any day of the week. It does apply the moment you collect information about an individual: a sole trader, a partner, a homeowner, or a director or guarantor you want to credit check.

So the form needs an upfront privacy clause that says what you will collect and why: to assess their creditworthiness, to run a credit check through a credit reporting agency, and to share information with a third party such as a debt collection agency if it comes to that. The Credit Reporting Privacy Code 2020 expects the person to have authorised the check, and from 1 May 2026 the Privacy Act also requires you to tell people when you collect information about them from someone else, which is what a credit report is. The person signing the form authorises a check on themselves with the same signature, so there is no need for a second one.

More on running the checks themselves, and what to look for, in checking a customer before you give credit.

See how we can help with your forms and terms

If your customers won’t fill it in

We hear it often from the businesses we work with. The forms go out and they don’t come back. People are wary of writing down personal details. The bigger customers say they don’t sign that sort of paperwork. So the form gets quietly dropped, and the account opens anyway.

The answer is to make the form fit the customer. For a homeowner or a smaller, casual customer, a short customer information form that still captures their full legal name and gets your terms signed off is enough, and it feels far less intimidating. For a business customer you are really financing, the fuller credit application is the right tool. It is an either or. Both get the legal details, and both are signed against your terms of trade. The aim is to create structure while removing the barriers.

Then make it part of how you work. Treat it as a customer service exercise: this is what we do with all of our clients, we get you to complete an account application, we do a wee bit of an assessment, and part of that is a credit check. Said as a matter of fact, early, while the relationship is good and fresh, it reads as standard practice. Your options are to prepay, pay on completion, or open an account, and an account comes with the form. Any bank would ask for the same before it lent you money.

Existing customers, and the ones you inherited

Every new account gets the form at the start. For the customers you already have, you do not need to chase hundreds of people for a signature. Send your updated terms out as a courtesy, make them easy to find, and keep a record you can trace back. Then ask your bigger customers to complete the form, and decide when you will refresh the details for everyone else.

If you bought the business, look hardest at the customers that came with it. Their paperwork may have been signed with the previous owner or the previous entity, and nobody may ever have checked it. A change of ownership, on either side, is the moment to re-paper the account.

For a bigger or riskier job, the credit application is where you start, and the personal guarantee or a general security agreement is where you add more. And if a customer won’t complete it, you still have choices: as much prepayment as possible, payment on completion, a lower credit limit, or PPSR security. Different tools, same outcome.

No form guarantees you get paid. A good one puts you in a far stronger position if it comes to it. This page is education and commercial insight from our own research and experience, not legal advice. Do your own research, and get legal advice for your own situation.