A credit hold stops new orders for a customer from going through until the reason is resolved. Common triggers are going over the credit limit, having invoices past due on a cash-on-delivery account, or a manual hold placed by the credit department.
The useful question is when the hold is checked. If it is checked after the truck is loaded, the product is already committed. Checking at the moment the order is placed, against open receivables plus orders not yet invoiced, keeps exposure from growing quietly.
In APFoodz credit checks run before an order is placed.