NOOD’S POLICY ON CUSTOMER TERMS

Our standard terms are 50% deposit at the time of order prior to production and the remaining 50% balance prior to shipping. We hope this is not too much of a hardship on the customer but obviously we will get complaints. The reasons for this policy are:
1. As a relatively new company, we don’t have payment history on most accounts.
2. Many, if not most of our orders involve custom styles and/or colors that once created, have limited marketability to other customers. Particularly the custom rugs.
3. Many orders are too small to justify purchasing credit info from credit rating sources such as Dun & Bradstreet, Experian, etc.
4. In this economy, companies that were once considered rock-solid are now in bankruptcy. Nood has lost more than it’s share of bad debt in 2009.
5. We previously factored our accounts receivable with CIT Commercial Services to reduce our credit risks but CIT itself is now under Chapter 11 bankruptcy.

However, even considering all of the above, if you have a customer that you have experience with or that feels that they deserve net 30 terms based on their credit history and references, then let me know and I will consider their request. The first step is submitting our new account form with credit references. We intend to be competitive with other carpet manufacturers so tell me if they are getting better terms elsewhere.

Rick Holsomback