Forfaiting

Forfaiting
The purchasing of an exporter's receivables (the amount importers owe the exporter) at a discount by paying cash. The forfaiter, the purchaser of the receivables, becomes the entity to whom the importer is obliged to pay its debt.

By purchasing these receivables - which are usually guaranteed by the importer's bank - the forfaiter frees the exporter from credit and from the risk of not receiving payment from the importer who purchased the goods on credit. While giving the exporter a cash payment, forfaiting allows the importer to buy goods for which it cannot immediately pay in full. The receivables, becoming a form of debt instrument that can be sold on the secondary market, are represented by bills of exchange or promissory notes, which are unconditional and easily transferred debt instruments.


Investment dictionary. . 2012.

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  • forfaiting — The supply of fixed rate, without recourse trade finance through the discounting of bills of exchange (bill of exchange) or promissory notes (promissory note). The bills of exchange or promissory notes will typically have been issued as deferred… …   Law dictionary

  • forfaiting — /förˈfā ting/ noun A method of export finance whereby debts on exported goods are bought and then sold on to banks, etc ORIGIN: Fr forfait forfeit or contract • • • forˈfaiter noun A person who, or company which, buys and sells such debts …   Useful english dictionary

  • Forfaiting — In trade finance, forfaiting involves the purchasing of receivables from exporters. The forfaiter will take on all the risks involved with the receivables. It is different from the factoring operation in the sense that forfaiting is a transaction …   Wikipedia

  • 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. Bloomberg Financial Dictionary * * * forfaiting for‧fait‧ing… …   Financial and business terms

  • Forfaiting — Forfaitierung (nach franz. à forfait: „in Bausch und Bogen” ohne Regress) bezeichnet den Ankauf von Forderungen unter Verzicht auf einen Rückgriff gegen den Verkäufer bei Zahlungsausfall (echte Forfaitierung). Allerdings haftet der Verkäufer für… …   Deutsch Wikipedia

  • forfaiting — A form of debt discounting for exporters in which a forfaiter accepts at a discount, and without recourse, a promissory note, bill of exchange, letter of credit, etc., received from a foreign buyer by an exporter. Maturities are normally from one …   Accounting dictionary

  • forfaiting — A form of debt discounting for exporters in which a forfaiter accepts at a discount, and without recourse, a promissory note, bill of exchange, letter of credit, etc. , received from a foreign buyer by an exporter. Maturities are normally from… …   Big dictionary of business and management

  • forfaiting — /ˈfɔfeɪtɪŋ/ (say fawfayting) noun the purchase of receivables such as promissory notes, bills of exchange, letters of credit, etc., from an exporter, usually at a discount, the advantage to the seller being that it converts credit to cash.… …  

  • forfaiting — / fɔ:fɪtɪŋ/ noun providing finance for exporters, where an agent (the forfaiter) accepts a bill of exchange from an overseas customer; he buys the bill at a discount, and collects the payments from the customer in due course …   Dictionary of banking and finance

  • International Forfaiting Association — The International Forfaiting Association was founded in 1999 as the worldwide trade association for the forfaiting industry. Its purpose is to develop business relationships and assist organisations involved in the forfaiting industry. IFA… …   Wikipedia

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