The credit limit represents the maximum amount a lender is willing to extend to a borrower, defining their borrowing capacity. Credit risk exposure, on the other hand, assesses the potential financial loss a lender faces if a borrower defaults on their obligations, considering factors such as the borrower’s creditworthiness and the amount of outstanding debt. While the credit limit sets a boundary for borrowing, credit risk exposure quantifies the potential risk associated with extending credit to a particular borrower.
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Autonomous O2C to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.