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240:), which was founded in 1978. The International Trade & Forfaiting Association (ITFA) was founded in 1999 as a worldwide trade association for the forfaiting industry with a cash contribution from VEFI. Its purpose is to develop business relationships and assist other forfaiting-related organizations.
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is a service providing medium-term financial support for export/import of capital goods. The third party providing the support is termed the forfaiter. The forfaiter provides medium-term finance to, and will commonly also take on certain risks from, the importer; and takes on all risk from the
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The benefits to the exporter from forfaiting include eliminating political, transfer, and commercial risks and improving cash flows. The benefit to the forfaiter is the extra margin on the loan to the exporter.
149:. Key differences are that forfait supports the buyer (importer) as well as the seller (exporter), and is available only for export/import transactions and in relation to capital goods. The word
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Days of grace, added to the actual number of days until maturity for the purpose of covering the number of days normally experienced in the transfer of payment, applicable to the country of risk.
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At its simplest, the receivables should be evidenced by a promissory note, a bill of exchange, a deferred-payment letter of credit, or a letter of forfaiting.
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J. Downes, J.E. Goodman, "Dictionary of
Finance & Investment Terms", Baron's Financial Guides, 2003; and J.G. Siegel, N. Dauber & J.K. Shim,
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Commitment fee, applied from the date the forfaiter is committed to undertake the financing, until the date of discounting.
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The oldest forfaiting association in the world is VEFI, the
Association of Forfaiters in
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Credit is extended to the importer for a period of between 180 days and seven years.
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The minimum bill size is normally $ 250,000, although $ 500,000 is preferred.
344:"Bills of Receviables, Bills of Exchange & Promissory note | OracleUG"
395:"Foreifting and Factoring Benefits for Exporters and Exporter's Banker"
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Discount rate, the interest element, usually quoted as a margin over
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The payment is normally receivable in any major convertible currency.
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or a guarantee is made by a bank, usually in the importer's country.
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Three elements relate to the pricing of a forfaiting transaction:
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The Indian
Financial System: Markets, Institutions and Services
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Vereinigung von forfaitierenden
Instituten in der Schweiz
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A.I. Trade
Finance, Inc. v. Laminaciones de Lesaca, S.A.
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141:, enabling the forfaiter to lay off some risks. Like
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The characteristics of a forfaiting transaction are:
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exporter, in return for a margin. Payment may be by
320:"What Forfaiting Means for Importers and Exporters"
56:. Unsourced material may be challenged and removed.
189:The contract can be for either goods or services.
309:, published September 2008, accessed 7 July 2018
480:"Guidelines on Risk Factors_EN_04-01-2018.pdf"
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116:Learn how and when to remove this message
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54:adding citations to reliable sources
16:Financial support for export/import
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41:needs additional citations for
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276:, 41 F.3d 830 (2d Cir. 1994).
418:Welcome to the VEFI-Website!
373:. Pearson Education India.
367:Pathak, Bharati V. (2010).
21:Forfeiting (disambiguation)
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224:Professional associations
19:Not to be confused with
427:, accessed 7 July 2018
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522:International finance
139:negotiable instrument
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287:The Vest Pocket CPA
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65:"Forfaiting"
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511:Categories
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300:Forfaiting
261:References
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76:newspapers
143:factoring
421:Archived
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244:See also
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