Letter Terminating Credit Because of Slow Payments

When a company offers a line of credit to a business or individual, it risks receiving slow payments. Sometimes, balances owed to your business will not be paid on time, according to the due dates established for the account. When a customer repeatedly makes late payments, it may be necessary to terminate the customer's line of credit in order to resolve the issue.

Company
Street Address
City, State, Zip

[Date]

Addressee
Street Address
City, State, Zip

Dear ___________,

Over the past two years, you have made [number] late payments for [number] orders. Because of the significant quantity and delinquency of those payments, we will no longer be able to extend credit to your account. We have endeavored to work with you in the past, and we have discussed these late payments with you on several occasions, but we have seen no changes in your payment behavior. Beginning today, all your orders will require cash or credit card payment before delivery. We also require that you pay your remaining balance before you place any further orders.

We will be happy to continue serving you under these conditions. You can expect the same quality of merchandise and the same fast service in the future.

Sincerely,

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