forfaiting contracts

Forfaiting contracts involve a seller (like a business) selling their international exports to a buyer and then selling the payment rights to a specialized financier, called a forfaiter. The forfaiter pays the seller upfront, usually at a discount, and takes on the risk of the buyer not paying later. It’s a way for exporters to improve cash flow and reduce credit risk, especially in international trade. Essentially, forfaiting converts long-term receivables into immediate cash, providing a secure and straightforward financing method for exporters.