Benefits of forfaiting to the Exporter
- The Exporter is paid cash, thus ensuring an enhanced cash-flow and a stronger balance sheet.
- Up to 100% of the contract value may be financed without recourse. There are no minimum down payment requirements and there is no risk retention by the Exporter.
- The Exporter is protected from late payments and defaults resulting from political, credit, and transfer events.
- The Exporter is also protected from adverse movements in interest and foreign exchange rates.
- The Exporter eliminates the administration required to collect the amounts due.
- The Exporter may be able to obtain pre-shipment financing from its banks, against a commitment from London Forfaiting to discount the receivable without recourse.
- The Exporter may have a significant commercial advantage over competitors who do not use forfaiting and who, therefore, may not be in a position to offer medium or long term supplier credit financing.
- There are virtually no restrictions on the type of product, commodity or service which can be financed and there are no limitations on foreign content.
- The Exporter can use forfaiting in conjunction with numerous Government export credit programmes, and may be able to access local export subsidies where available.
- The Exporter keeps direct contact with the Importer, and guides all the financial and commercial discussions through to the signing of the contract.
- London Forfaiting can fix interest rates up to 18 months in advance of a shipment date, protecting the Exporter from increases in interest rates, during the manufacturing and delivery period.
- Repayment terms can be structured to meet the Buyer's cash-flow needs, including grace periods.
- Most major currencies are acceptable.