Forfaiting means purchase of receivables due and payable in the future (medium- and long-term receivables) arising from export of goods or services, without possible recourse for the exporter, but with security by one of the bank payment tools, as e.g.:

• avaled bill-of-exchange,
• Letter-of-Credit with deferred maturity,
• bank guarantee.

Use of forfaiting:

Forfaiting may be used particularly by exporters who need to raise capital for other obligations, and also who need to obtain cash to make payment to the supplier, or in a short time thereafter. Naturally, forfaiting may be applied also in the domestic trade.

Benefits for the person selling the receivable:

• immediate raising of capital (payment to the entitled person is made upon submission of agreed documents),
• purchase of a receivable without recourse,
• operative form of financing.

Target group: particularly legal persons