Forfaiting

Purchase of receivables to maturity arising from past transactions on a without recourse basis

How may we
assist you?

Receive payment immediately
after delivery of goods and
acceptance of documents

We will purchase your receivables with all their risks.

Forfaiting costs can be reflected in purchase prices

Win customers by offering deferred due date 

Funds available for current needs 

No need to increase your debt level 

USEFUL INFORMATION

  • Assignment for a fee of outstanding receivables under a documentary letter of credit for receivables arising from past business transactions
  • Intended for sole traders and legal entities
  • Forfaiting is provided on a without recourse basis for the original owner of receivables
  • With forfaiting, you can receive payment immediately after the goods/services are delivered and the documents accepted under a documentary letter of credit
  • Reduce the amount of receivables in your balance sheet
  • Improve your company’s financial ratios
  • Increase your competitiveness and get new customers through options for deferred due dates
  • Individual price for assignment of receivables depends on the financial standing of the bank issuing the documentary letter of credit and the amount and maturity of such receivables. Bank fees are usually deducted from the nominal value of the receivables paid when the forfaiting transaction is carried out  
  • Minimum amount of receivables is usually CZK 1 million or foreign currency equivalent
  • Minimum maturity (including the deferral) of receivables is usually 45 days
  • Forfaiting can be arranged before a purchase contract is signed so that its costs can be reflected in the price of the delivery.

Transaction scheme 

  1. Purchase contract
  2. Request for issue of a documentary letter of credit
  3. Letter of credit
  4. Delivery of goods or services
  5. Presentation of L/C documents
  6. Acceptance of L/C documents
  7. Forfaiting contract + assignment of receivables
  8. Payment of the discounted nominal value of receivables
  9. Collection of the nominal value of the receivables as at due date

Documents:

Find your global transaction payment systems specialist (PDF, 253 kB)