Forfaiting - we find the right buyer for your covered export receivables

Forfaiting, i.e. finding a buyer for covered export receivables, is not at all easy.

Not every bank buys every debt. If none of your house banks buys receivables, then things can quickly become difficult.

We know which banks are interested in forfaiting. Enter your request once and receive suitable offers.

Basic knowledge forfaiting

Non-Recourse Export-Financing (Forfaiting) is the non-recourse purchase of medium and long-term receivables, for example, from a supplier credit or deffered payment l/c, by a bank or a specialized financial institution.

 

With contractually compliant delivery / performance for you as exporter payment claims arise against your customer abroad. These can be sold to a bank in Germany or Europe "à forfait", i.e. with all political and payment risks (that means, without recourse). In this way, the buyer of your receivables don't have any right of recourse in the event of non-payment; You are freed from all risks and immediately receive the purchase price. However, the receivables must exist, must be legally valid and free from third party rights at the time of forfaiting and throughout the agreed funding period. As an exporter, you are responsible for the legal existance of the receivables (verity risk), for the authenticity of the documents submitted and the fulfillment of the delivery contract. But that's not different to domestic business.

 

The costs of forfaiting are made up of the standard market refinancing costs and a risk premium (discount rate), which depends on the payment date and the creditworthiness of the debtor (importer) or guarantor (i.e. bank in the country of the importer) and the importing country.

 

The creditworthiness of the importer (debtor) and the debtor country also depends on whether the conclusion of credit insurance (e.g. Hermes cover or private credit insurance) is required in order for a claim to be forfaited. The anticipated forfaiting costs can be factored in the order value (buyer interest). From your view as exporter the forfaiting then, more or less, will be cost-neutral.

 

With us you can quickly and easily find a forfaiting for your export receivables. The earlier in your sales process you send us your inquiry, the better the solution will be.

Advantages

  • Suitable for almost any size of order
  • You'll improve your liquidity
  • If you sell your receivables without recourse, then the buyer waives any recourse to you in the event of non payment or default
  • You relieve your balance sheet - liquid assets instead of receivables

Disadvantages

  • Your receivables have to be legally existend to sell them and remain so in future. You, however, can conlude a forfaiting prior to shipment.
  • Buying banks are seeking for prove that you already have experience in export finance and are drafting your contracts properly. Tip: don't be afraid. With an experienced consultant at your side even the first business will succeed
  • A Hermes Cover or Industrial Credit Insurance (Single Risk Cover) is usually required (and in your own interest)
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