Forfaiting: Difference between revisions
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A process of purchasing a negotiable instrument without recourse to previous holders, the credit of the negotiable instrument normally having been strengthened by the additional of an aval. | A process of purchasing a negotiable instrument without recourse to previous holders, the credit of the negotiable instrument normally having been strengthened by the additional of an aval. | ||
A forfaiter, usually a bank or a non-bank financial institution, provides forfaiting services. | |||
The forfaiting agreement sets out the arrangement between the initial seller and the primary forfaiter. | |||
Forfaiting is sometimes known as 'bill discounting'. | |||
One application is the discounting - without recourse - of a promissory note, bill of exchange or letter of credit received from an overseas buyer by an exporter. | |||
Forfaiting purchases qualified, select, individual transactions (in contrast with factoring which normally purchases all of a firm's receivables). | |||
== See also == | == See also == | ||
* [[Aval]] | * [[Aval]] | ||
* [[Bill of exchange]] | * [[Bill of exchange]] | ||
* [[Bill discounting]] | |||
* [[Factoring]] | |||
* [[International Trade and Forfaiting Association]] (ITFA) | |||
* [[Negotiable instrument]] | * [[Negotiable instrument]] | ||
* [[Promissory note]] | * [[Promissory note]] | ||
* [[Recourse]] | * [[Recourse]] | ||
* [[Supply chain finance]] | |||
* [[Uniform Rules for Forfaiting]] | |||
* [[Without recourse]] | * [[Without recourse]] | ||
[[Category:Cash_management]] | |||
[[Category:Financial_products_and_markets]] | |||
[[Category:Liquidity_management]] | |||
[[Category:Trade_finance]] | |||
Latest revision as of 12:52, 26 June 2022
A process of purchasing a negotiable instrument without recourse to previous holders, the credit of the negotiable instrument normally having been strengthened by the additional of an aval.
A forfaiter, usually a bank or a non-bank financial institution, provides forfaiting services.
The forfaiting agreement sets out the arrangement between the initial seller and the primary forfaiter.
Forfaiting is sometimes known as 'bill discounting'.
One application is the discounting - without recourse - of a promissory note, bill of exchange or letter of credit received from an overseas buyer by an exporter.
Forfaiting purchases qualified, select, individual transactions (in contrast with factoring which normally purchases all of a firm's receivables).
