Forfaiting

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

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

Documents: