Benefits of Forfaiting
Forfaiting is an interesting product for many companies. They
can reap major benefits from the disposal of account receivables.
Forfaiting is also particularly interesting with regard to the
currently held 'Basle II' discussions. There are many benefits
for every company of distinction in forfaiting.
What can be your benefits?
1. Risks are eliminated: you have to worry no
more about payment and/or political risks
2. The strain on your balance sheet is relieved
3. Your liquidity is improved
4. The strain on credit lines at banks is relieved
5. You avoid interest and exchange rate risks
Account receivables are purchased
at an agreed discount interest rate. These then are discounted and
the net amount is placed at the disposal of the vendor immediately.
You could be that vendor.
Forfaiting is an interesting proposition
for the manufacturers of capital goods, traders, small-and medium-sized
businesses and large-scale industry. The account receivable, which
is to be forfaited ideally, entails a volume of at least Euro 250,000
and a (residual) term of at least ninety days.