Credit Limit

Customer Credit Limit is the maximum amount of credit that an export enterprise grants to a specific customer, i.e., the upper limit of accumulated unpaid debt allowed for that customer. Usage scenarios include: setting an initial limit when opening an account for a new customer, existing customers applying for a limit increase, and requiring approval or prepayment when an order exceeds the limit. Precautions: the limit should be dynamically adjusted based on customer credit investigations (e.g., financial statements, bank credit, historical payment records); it should be combined with credit insurance and guarantee measures; shipments exceeding the limit require risk control approval. Difference from 'Credit Term': the limit controls the total amount owed, while the term controls payment timing; opposite to 'advance payment', a credit limit means shipping first and collecting payment later. Unlike 'credit insurance', the limit is an internal risk control tool, while insurance is external risk transfer. Reasonably setting the limit can balance sales growth and bad debt risk.