CCA CREDIT INTELLIGENCE

Risk Ratings & Recommendations

Understanding Risk Ratings & Credit Recommendations: At CCA, our mission is to provide members with tools and insights to help them make more informed credit decisions.

Each rating—from Very Low Risk to Very High Risk—reflects an analysis of payment history and other relevant factors. The examples provided are not directives; every member should apply their own judgment, business policies, and legal advice.

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The rating framework

Example considerations by risk category.

A clear, consistent way to interpret credit signals while keeping each decision independent.

Very Low Risk

Customers with strong credit profiles, minimal risk, and excellent payment history.

Possible considerations

Many businesses choose to offer standard credit terms (e.g., Net 30).
Some businesses extend longer terms for trusted or repeat customers.
Incentives like early-payment discounts (e.g., 2%/10 Net 30) are sometimes used to encourage timely payment.

Low Risk

Customers with minor risks or occasional delays but generally reliable payment behavior.

Possible considerations

Businesses may offer shorter terms (e.g., Net 14–30) with periodic reviews.
For larger orders, some require partial deposits as an added precaution.
First-time buyers are sometimes offered shorter terms to build trust.

Medium Risk

Customers with noticeable risks or inconsistent payment behavior.

Possible considerations

Common approaches include COD for new orders or deposits for larger purchases.
Some businesses gradually expand credit terms after consistent performance.
Additional protections such as guarantees are sometimes used.

High Risk

Customers with significant financial or payment concerns.

Possible considerations

Many businesses limit exposure to upfront payment or COD until reliability is established.
Extra protections (e.g., guarantees, liens) are sometimes used for larger transactions.
Regular reviews of accounts help determine whether to continue doing business.

Very High Risk

Customers with severe and unresolved issues, such as ongoing debts, habitual late payments, or disputes.

Possible considerations

Common industry practice is to require payment in advance or COD.
Some businesses may decline new orders until prior issues are resolved.
Ongoing reviews are used to determine whether stricter measures are appropriate.

Important reminder

CCA’s Risk Ratings and accompanying considerations are for informational purposes only. They provide a framework to help members think about risk in their own credit policies and do not constitute instructions, mandates, or agreements among members.

Each member is solely responsible for determining appropriate credit decisions based on their circumstances, policies, and applicable law. Questions can be sent to support@cannabizcredit.com.

Disclaimer

CCA provides independent credit information tools to assist members in making their own business decisions. CCA does not set industry standards, dictate credit terms, or coordinate member actions. Examples are informational only and should not be viewed as recommendations to act in concert with other businesses.