Benefits of Forfeiting 🏁
For Exporter (Seller) ✅
- 100% Risk Transfer: Political risk, Commercial risk, Exchange rate risk - ALL transferred to Forfeiter.
- Improved Liquidity: Immediate 100% cash.
- Simplified Balance Sheet: Receivables removed.
- Competitive Edge: Can offer credit to foreign buyers easily.
For Importer (Buyer) ✅
- Credit Period: Gets medium-term credit (1-5 years).
- Fixed Rate: Interest rate is fixed for the entire period.
- Simplicity: Simpler than taking a bank loan.
Factoring vs Forfeiting 🆚
| Feature | Factoring | Forfeiting |
|---|---|---|
| Trade | Usually Domestic | Usually International (Export) |
| Recourse | Usually With Recourse | Always Without Recourse |
| Maturity | Short Term (90-120 days) | Medium Term (1-5 years) |
| Finance | 80% Advance | 100% Discounting |
| Cost | Cost borne by Seller | Cost usually borne by Buyer (added to price) |
Quiz Time! 🎯
Test Your Knowledge
Question 1 of 3
1. Who bears the cost in Forfeiting usually?
💡 Final Wisdom: "And that's a wrap! From Banking basics to International Forfeiting, you have traveled the entire financial universe. You are now ready to conquer the exams and the world of finance!" 🎓🌍🚀
🎉 COURSE COMPLETE! Banking and Financial Services 65/65 Lessons Done. Congratulations! 🏆