Businesses warn of payment delays<\/p>\n
Cargo offloaded at safe ports<\/p>\n
Central bank supports liquidity <\/p>\n
UAE businesses are bracing for cashflow squeezes and payment delays as the US-Israeli war against Iran<\/a> prevents cargo leaving or entering the region, executives have told AGBI.<\/p>\n Major shipping lines are offloading Gulf-bound containers<\/a> at the nearest safe port while the Strait of Hormuz, a critical artery for global trade, is blocked and supply chains are disrupted.<\/p>\n Cargo is being left thousands of miles from its intended destination, resulting in delayed payments from customers who have yet to receive their goods. Companies trying to transport their goods still have to pay their own suppliers and absorb much higher freight costs to reroute shipments.<\/p>\n \u201cCovering accounts receivables is becoming a huge concern for companies right now,\u201d said Aur\u00e9lien Paradis, CEO of AU Group MEA, a credit insurance brokerage.<\/p>\n \u201cWe are receiving a lot of calls from companies that want to get insured because they know what will come next, unfortunately. The first thing [customers] do when they face issues is delay payment to suppliers,\u201d he told AGBI.<\/p>\n Paradis said credit insurance premiums \u2013 used when businesses want to protect themselves against financial loss if customers fail to pay for goods \u2013 are up 10 to 20 percent since the conflict began.<\/p>\n Companies that import goods for resale \u2013 a important strand of UAE business supported by the country\u2019s location and trade infrastructure \u2013 are particularly exposed to late payments since invoices can make up a large share of their assets.<\/p>\n Receivables \u2013 money due the company for products or services it has already delivered \u2013 can represent more than half of total assets, according to Paradis. Non-payment by a major client can push companies into bankruptcy, he warned.<\/p>\n \u201cThe real problem is not just the supply, it\u2019s cashflow,\u201d said Saleem Ahmed, CEO of Dahbashi Group, a UAE-based supplier of heavy equipment spare parts and services.<\/p>\n \u201cUntil the situation eases, you have to find ways and means to keep yourself afloat, pay your suppliers, and deal with the people who can pay you.\u201d\u00a0<\/p>\n The UAE central bank has moved to support liquidity and credit<\/a>, allowing banks to delay classifying corporate loans hit by \u201cextraordinary circumstances\u201d while urging continued lending to customers.<\/p>\n Ahmed said he might have to refuse to deal with customers seen as higher credit risk, but worries this could damage relationships in the future.<\/p>\n \u201cIt\u2019s a very difficult situation,\u201d he said, but he has little choice given rising costs \u2013 some shipping routes are tripling in price and air freight is up 15 to 20 percent.<\/p>\n \nFurther reading:\n<\/p>\n One shipment bound for Doha was diverted first to Mumbai, then to Fujairah, where port congestion forced a 24-hour clearance deadline or there would be penalties.<\/p>\n Ahmed had budgeted for 15 percent growth in 2026 and said \u201cthe first two months of the year were very good\u201d \u2013 before the conflict erupted on February 28.<\/p>\n Activity has stalled across ports, marine operators and oil and gas companies he supplies, he said.<\/p>\n