Forfaiter


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Related to Forfaiter: forfeiting

Forfaiter

Purchaser of promises to pay issued by importers.

Forfaiter (Primary)

An individual or financial entity that arranges a forfaiting transaction directly with an exporter and then holds or sells on the payment obligations of the importer/ guarantor.

Forfaiter (Secondary)

An individual or financial entity that buys or sells the payment obligations of the importer/ guarantor.

Forfaiting

In international trade, the selling of an exporter's receivables for a particular transaction. It is similar to factoring except in scope. While a company sells all of its accounts receivable in factoring, an exporter only sells one receivable for one, perhaps high risk, transaction. In forfaiting, the buyer is known as a forfaiter, and assumes all the risks associated with collecting the receivables. Generally, the exporter forfaits the receivable at a discount. This improves cash flow but reduces income.
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References in periodicals archive ?
When the exporter is known to the forfaiter, a transaction can even close in a day.
Is it because forfaiters like the democratic stance of President Kim Dae Jung more than the continuous battles around Prime Minister Bulent Ecevit, or do they look more at economic fundamentals?
Will a forfaiter buy invoices with or without recourse?