companies, is forfaiting: a promise from a forfaiter to buy a company's receivable at some point in the future.
In one example, Bernardi noted that if a company was selling to another company in a less than-sturdy market, they could increase their sale price to the buyer, but extend the financing period, then a forfaiter would promise to buy that receivable from the seller, to the seller's profit.
Forfaiting is a financial transaction involving the purchase of receivables from exporters by a forfaiter
. The forfaiter
takes on all the risks associated with the receivables but earns a margin.
In that case, the forfaiter
, the purchaser of the receivables, becomes the entity to whom the importer is obliged to pay its debt.
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?
The debt instrument, usually in the form of a draft, may or may not be "avalized" or guaranteed by the buyer's bank in order to enhance the instrument for sale to a forfaiter
. To expedite matters, a time draft collection procedure may be used where the draft is sent by the forfaiting bank to the buyer's bank along with the original shipping documents and instructions to release the documents once the draft has been accepted ("documents against acceptance") and, if necessary, avalized.
As the exporter begins to evaluate a sales lead, he would contact a forfaiter
and request an indication of interest.
The cost of forfaiting a transaction is based on the discount rate used by the forfaiter
. The discount rate is based on market pricing.
commented that he would "do Chile at five years" but he couldn't get his hands on any notes and when he did it was too finely priced.
and 3) 100% stake in the share capital of Laiki Factors and Forfaiters