Forfaiting for more liquidity and more Import and Export deals.
Learn how Forfaiting can help exporters to conduct more sales and receive immediate cash while importers pay after 180 days for commodities or within 3 years if they import any capital goods.
Who can be qualified and benefit from Forfaiting?
Forfaiting is for exporters of capital equipment seeking to offer or are required to offer extended repayment terms. Typically, a Forfaiting transaction is backed by a Promissory Note endorsed, or a Letter of Credit issued by the importer/buyer’s bank with deferred payment terms. In cooperation with investors and banks of the SFS Group, such payment instruments can be discounted to pay the exporter cash right upon the shipping date of the goods.
Forfaiting can be useful for buyers of capital equipment or commodities and for suppliers seeking a mechanism to offer an extended payment period to the importer/client. In this Forfaiting model any established importer/buyer entity will have to be able to raise a Letter of Credit (or have a Promissory Note endorsed by a bank) which then could be discount for the exporter for instant cash.
Forfaiting is for established buyer- and seller companies only. Since this is a no-recourse finance model, it can be risky for the Forfaiter, and it is therefore not available if the exporter does not have an established company and a longer-term track record of successful trading. The Importer’s bank must support its client by issuing or endorsing a financial payment instrument on deferred payment terms.
The buyer’s bank (issuing or endorsing the payment instrument) will not need to be a prime world bank, but it will have to be an acceptable institution.
Transaction Size start from Euro 500k and can be as high as Euro 20 M. at this time. There must be sufficient margin in the transaction. The higher the margin, the greater are the chances that a transaction is acceptable for this financing strategy.
Request and Offer!
This is a very competitive financial model based on low interest rates based on LIBOR plus a premium. Ultimate costs depend upon the individual transaction, the parties and the risks involved. To find out if any of your transactions can be qualified, please request an initial online assessment here.
Chances to materialize a transaction can be very high if the borrower’s company is of substance. If you would like to discuss this further, please use the reply form, or call 00353860325153. This number also works on Whatsapp, Signal, Telegram, BOTIM and WeChat.
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