Forfaiting “finance without resource”
With our help
You want to offer your foreign customers payment terms without impairing your cash flow? You want to protect your liquidity and not carry unknown country risks on your balance sheet? You have won a new customer or closed your first transaction in a new market?
Obtain cash ahead of payment date by the importer while managing commercial and credit risk. Forfaiting makes your business more competitive as it allows you to offer longer credit terms to your buyers, without needing to wait for payment. Forfaiting works as an off-balance sheet financing solution that improves financial statements.
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Forfaiting Benefits
OTFC arranges forfaiting for exports and its banks and advance the receivables from international trade transactions. We assume the economic, political and currency-specific risks on clients’ behalf. As such, the seller could transfer the payment claim without recourse and enjoy the associated benefits:
- Immediate influx of capital
- Optimization of the balance sheet (accounting of liquid assets instead of receivables)
- Reduction in administration overheads (responsibility for receivables management and collection)
What is the forfaiting arrangement procedure?
It will be definitely more efficient to approach us when you are negotiating the contract with importer. By providing below key information, we could suggest whether the transaction could arrange forfaiting or not and how much it is likely to cost.
- The country of the importer
- The importer’s name
- The type of goods
- The value of the goods
- The expected shipment date
- The repayment terms sought by the importer
- Whether the importer’s obligations will be guaranteed by a bank, and if so, who?
We could provide you an indication of the costs involved, however at this stage neither party is committed in any way. Both the lines and discount rate will be fixed until you sign the forfaiting agreement with bank designed by us. You will receive the advance payment (deduce interest cost and commitment cost) normally 14 days later after presenting the complying documents. Since this payment is without recourse, you will be free of the risks concerning about collecting.
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