Trade Finance check0 / 1 answered · 0 correct
Check 1
What feature commonly distinguishes forfaiting?
Forfaiting
Learn the without-recourse purchase of future trade payment obligations.
Simple meaning
Forfaiting is a form of receivables purchase in which future payment obligations represented by financial instruments or payment obligations are purchased without recourse, normally at a discount or for a financing charge.
Typical use
It is often associated with medium-term trade receivables, bills, promissory notes, bank guarantees or other acceptable payment obligations, depending on the financier.
Risk transfer
Without recourse means the forfaiter primarily takes the payment-obligor risk within the agreed structure, subject to representations, fraud and contractual exceptions.
Pricing and eligibility
Country risk, obligor/guarantor quality, tenor, documentation and transferability affect whether a forfaiter accepts the transaction.
Remember thisForfaiting is a financing technique, not another SWIFT message type.
Finished this lesson?
Mark it complete. Your progress stays on this device.