SERVICES
Forfaiting
| What is Forfaiting? |
Forfaiting involves the discounting of trade receivables on a without-recourse basis.
This financial tool enables an Exporter/Seller to offer appealing credit terms to buyers without restricting cash flow or bearing the risks associated with late payments or defaults. It also shields the exporter from adverse fluctuations in interest and/or currency rates throughout the credit period.
| Applications and tenors |
Forfaiting can be applied to finance various goods and services, spanning commodities, technology, consumer products, capital equipment, and turn-key projects. The duration of tenors generally extends from six months to seven years, depending on the nature of the underlying transaction.
| What is discountable? |
Typically, the buyer’s indebtedness to the seller should be substantiated through various means such as Promissory Notes, Bills of Exchange, Letters of Credit, Payment Guarantees, or Open Book Receivables. This debt usually necessitates a guarantee or endorsement from a reputable bank, although certain corporate or government buyers may be exempt from requiring additional bank security.
For more information please contact KBCE on info@kbc-euro.com or admin@kbc-euro.com