forfaiting


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Forfaiting

A form of factoring that involves selling large, medium to long-term receivables to buyers (forfaiters) who are willing and able to bear the costs and risks of credit and collections.

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.

forfaiting

the provision of finance by one firm (the forfaiter) to another firm (the client) by purchasing goods the client has pre-sold to a customer but for which he has not yet been paid. The forfaiter (which often is a subsidiary of a commercial bank or a specialist firm) buys the client's goods at a discounted cash price, thus releasing ready money for the client to use to finance his WORKING CAPITAL requirements. The forfaiter then arranges to collect the payment when due from the customer to whom the goods have been sold, thus also saving the client the paperwork involved.

Forfaiting extends to both domestic and export sales. It can be especially useful in the latter context in the case of expensive capital equipment involving long delivery dates, and where there are possible complications arising from dealing with relatively unknown customers, exchange rate fluctuations, etc. See EXPORTING.

forfaiting

the provision of finance by one firm (the forfaiter) to another firm (the client) by purchasing goods that the client has presold to a customer but for which he has not yet been paid. The forfaiter (which often is a subsidiary of a commercial bank or a specialist firm) buys the client's goods at a discounted cash price, thus releasing ready money for the client to use to finance his WORKING CAPITAL requirements. The forfaiter then arranges to collect the payment when due from the customer to whom the goods have been sold, thus also saving the client the paperwork involved.
References in periodicals archive ?
* Increase of R$491.0 million in Other Liabilities in function of forfaiting operations relative to slab and raw materials supply.
93/2009, non-bank financial institutions can perform the following crediting activities: a) granting of loans, including but not limited to, consumer loans, mortgages, real estate loans, microcredits, financing of commercial transactions, factoring transactions, discount and forfaiting; b) financial leasing; c) guarantees, assuming commitments to guarantee, assuming funding commitments; d) granting of loans with receipt of goods in pledge, or pawning by pawnshops; e) granting of loans to the members of non-profit associations organized on the basis of the wilful consent of employees/ pensioners for the purpose of supporting their members through financial loans by these entities organized in the legal form of mutual aid banks; f) other forms of in lending.
Earlier this year BNY Mellon received two other awards, a gold for best bank trade services provider and a bronze for most innovative trade bank, at the 2014 Trade & Forfaiting Review Excellence Awards.
Forfaiting. Funciona muy bien en Mexico, es conocido por el 52% de las pym es que exportan, y puede ser una solucion sencilla y barata frente a otras alternativas (VISA, 2013).
La inclusion de la cesion de creditos en garantia como mecanismo dirigido a garantizar las obligaciones del cedente o garante demuestra la importancia del credito como activo de los empresarios, lo que se ve reflejado en los diversos negocios que tienen por objeto el derecho de credito, empezando por la misma cesion de creditos, la cesion de creditos en garantia, el factoring, el forfaiting internacional, entre otros.
CJSC has told ArmInfo that Bank ZENIT (Open Joint Stock Company), Federated Investors, London Forfaiting Company Ltd and VTB
These include winning 11 EMEA Finance Achievement' awards; the 'African Deal of the Year' award for Konkola Copper Mines financing in the 2013 Project Finance Deal of the Year Awards; 'Commercial Deal of the Year' in the 2013 Trade & Forfaiting Review Deals of the Year for arranging finance for commodities trader Export Trading Group; and being named 'Best Trade Finance Bank in Africa' by Global Finance.
While explaining the nature of trade financing carried out by DF DEUTSCHE FORFAIT AG Ulrich Wippermann said in an interview that DF Deutsche Forfait AG operates as a forfaiting company worldwide.
It owns the UK-registered London Forfaiting Company, together with factoring joint-ventures in Russia, Romania, Brazil, India, Dubai, Egypt and Lebanon.
MANAMA: The ICC Bahrain, the national committee of the International Chamber of Commerce in the kingdom, has played a major role in drafting rules for forfaiting business.
Standard Bank has been named Best Trade Bank in Africa in the annual Excellence Awards of Trade & Forfaiting Review (TFR).
Summary: Mashreq was recently recognised at the TFR Excellence Awards 2012 from London-based Trade & Forfaiting Review (TFR) Magazine.