This article investigates the determinant factors of supply and demand for trade credit by micro, small and medium-sized enterprises (MSMEs), using data collected in a survey of managers from 481 firms in 32 cities in the states of São Paulo and Minas Gerais (Brazil) between 2008 and 2010. The multivariate relationship model proposed here is grounded in trade credit, agency and transaction costs theories. This study is based on a technique known as path analysis that uses a system of simple regressions estimated by simultaneous equations. The main results show the following: (i) trade credit and short-term bank loans are supplementary (and not substitute) sources of funds for MSMEs, which demonstrates that trade credit can be used by financial institutions as an indicator of the creditworthiness of the company; (ii) the proportion of credit sales, the days sales outstanding measure and sales growth are positively related to the amount of trade credit demanded, which suggests that trade credit is transferred along the supply chain; and (iii) the supply of trade credit is positively related to the importance that management ascribes to both internal capital and bank credit, which illustrates the strategic use of the supply of trade credit to increase sales. These results have important implications for companies' managers, financial institutions and the government agencies responsible for formulating policies that support and promote the development of small and medium-sized enterprises.