Core Viewpoint - Increasing requests from overseas clients to extend payment terms to 90-120 days are causing significant challenges for foreign trade enterprises, leading to concerns over cash flow and potential defaults [1][2][3] Group 1: Payment Term Changes - Approximately 20% of overseas clients are now requesting extended payment terms, a situation that has never been encountered in the past 20 years of foreign trade experience [1][3] - The reasons cited by clients for extending payment terms include macroeconomic fluctuations, decreased consumer spending, and geopolitical risks affecting local economies [2][3][4] Group 2: Impact on Cash Flow - Extended payment terms are creating cash flow pressures for foreign trade companies, forcing them to use personal savings to cover supplier costs [6][8] - Companies are facing the risk of significant profit loss if clients default on payments, with some indicating that a few defaults could consume an entire year's profit [2][6] Group 3: Industry Response - Many foreign trade enterprises are exploring strategies to mitigate risks, such as offering discounts for early payments or requiring higher upfront deposits [6][7] - Some companies are also considering legal measures and contract adjustments to protect against potential defaults [10][11] Group 4: Financing Challenges - Banks are tightening lending criteria in response to the increased risk of payment defaults, making it harder for companies to secure trade financing [9][10] - Companies are attempting to use export credit insurance to hedge against payment risks, but face challenges due to clients' lack of credit ratings [10][11]

Core Viewpoint - Increasing number of overseas clients are requesting to extend payment terms to 90-120 days due to macroeconomic fluctuations affecting consumer willingness and ability to spend, leading to longer product sales cycles [1][3][4] Group 1: Impact on Foreign Trade Enterprises - Approximately 20% of overseas clients of a lighting and home design export company have requested extended payment terms, a situation unprecedented in over 20 years of foreign trade experience [2][6] - Concerns arise that agreeing to these extended terms may lead to significant financial risks, including potential malicious defaults from clients, which could consume annual business profits [4][11] - The trend of extending payment terms is becoming commonplace, with clients citing geopolitical risks and economic downturns as reasons for their requests [6][7] Group 2: Factors Influencing Payment Term Extensions - Three main factors are influencing the requests for extended payment terms: global economic fluctuations, reluctance to incur high-interest financing costs, and currency depreciation pressures due to rising dollar indices [7][8] - Clients in Eastern Europe have reported unsold inventory and are relying on holiday sales to recover funds, further complicating payment timelines [6][8] Group 3: Responses from Foreign Trade Enterprises - Some companies are proposing discounts for early payments or increased upfront payments to mitigate risks associated with extended payment terms [11][12] - However, these measures have had limited success as clients continue to express financial constraints due to the economic climate [12] Group 4: Financing Challenges - As the number of clients requesting extended payment terms increases, companies are experiencing heightened pressure on cash flow, prompting them to seek trade financing solutions [14][15] - Banks are tightening lending criteria due to concerns over potential defaults linked to extended payment terms, making it more difficult for companies to secure necessary financing [15][16] - Companies are exploring options like export credit insurance to hedge against payment defaults, but face challenges in obtaining coverage due to clients' lack of credit ratings [16]