What a credit hold means from the other side of the desk
A supplier moves a customer to cash-on-delivery for one reason: the account has been over its limit or past its terms more than once, and the credit desk has decided that continuing to ship is increasing the eventual write-off. It is a process on their side, not a mood. A distressed customer, in their experience, pays whichever supplier shouts loudest, and a hold is how they make sure that is them.
That tells you what restores it. Not a phone call about how good a customer you have been. A cleared balance, a run of orders paid on delivery without a bounced payment, and a written request that names a date.
The immediate problem: paying at the door
COD means every delivery is cash out the day it arrives, weeks before it turns into revenue. For a business that was using thirty days of supplier credit as working capital — which is most of them — that is a month of purchases pulled forward all at once.
A working capital loan or a cash advance on your last three to six months of deposits covers it. Decision in about a day, money in one to three business days, amounts around half to one and a half times a month's deposits. Size it to a month or so of purchases plus the arrears, and no more.
Weekly payments. Your revenue arrives as sales; the repayment should follow the same rhythm, not run ahead of it daily.
Getting terms back
Pay the arrears in one payment, not installments, and then ask for terms on a schedule: five COD orders paid without incident, then net-15, then net-30. Put the request in an email to the credit manager, not your rep — the rep wants the sale and does not decide credit.
While you are on COD, the payment method matters. A bounced check or a declined card during the probation period resets the clock. Pay by bank transfer the day before delivery if the supplier will take it.
And if the supplier will not restore terms, a second supplier who will open a small credit line on the strength of six months of clean statements is worth the setup. Concentration on one supplier is how a hold becomes a shutdown.
Fix the reason, or this repeats
A business that ends up on COD was paying suppliers with the next month's sales. That works until one slow month, and then it does not. The durable fix is a line of credit sized to a month of purchases, drawn when a supplier invoice is due and repaid when the goods sell — which is what supplier terms were quietly doing before the hold. Apply for it once the statements show three clean months, not during the hold.