forfaiting market

Forfaiting is a financial process where a business sells its international trade receivables—documents like invoices or promissory notes—to a specialized lender called a forfaiter. The forfaiter pays the business upfront, offering immediate cash flow, and then assumes the risk of collecting payments from the buyer later. This mechanism helps exporters manage credit risk and improve liquidity without assuming the buyer's default risk. The forfaiting market involves these transactions, primarily for large international deals, providing a way to finance exports securely and efficiently.