Forfaiting

Forfaiting is intended for:

• clients who supply their goods and services with deferred payment

Characteristics of Forfaiting:

• assignment to the bank of the client’s receivables due in the future for a fee, without recourse to the original owner of the receivable (usually the supplier)
• the subject of forfaiting is receivables which were created in terms of commercial transactions implemented by the client
• can be implemented in two ways:
  • at the risk of the banking entity, when the receivable is represented by
    • a bill of exchange or promissory note with bank aval
    • a documentary letter of credit
  • at the risk of the commercial entity (debtor – customer), when the receivable represents
    • an invoice
    • bill of exchange without bank aval
• minimum receivable maturity: usually 45 days
• minimum amount of the assigned receivable: approx. EUR 33,000 or equivalent of this amount in foreign currency
• the price for assigning the receivable is set individually and especially depends on:
  • the financial standing of the debtor
  • the level, maturity and nature of the receivable
• all fees are usually deducted from the amount paid at the moment the receivable is purchased

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