Forfaiting

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.

See also

• Aval
• Bill of exchange
• Negotiable instrument
• Promissory note
• Recourse
• Without recourse