Funding your Receivables through Forfaiting
Today, smaller businesses and larger SME’s have to find an alternative way of financing. Therefore, Forfaiting has become an important and vital factor for consideration. As a result, our customers will enjoy improved liquidity. Furthermore, credit risks from non-payment from their clients are reduced. Improving cash flow is key, allowing you to purchase additional materials or goods for your ongoing business.
Forfaiting includes the purchasing of bills of exchange, promissory notes, and of course deferred payment letters from your customers. These are usually guaranteed by a bank. Being our client, you will benefit from our large global network to successfully close transactions.
The Corporate Finance Institute UK points out, that the Forfaiter is taking certain risks of the shoulders of an Importer or Exporter. Thus, such facilities make sense.
However, due to expanded paperwork for Export or Import transactions, such solutions are normally only feasible from a minimum bill size of 500.000 £ (or 500.000 €) but on the other hand the lenght of the credit facilities ranges from 6 months to up to 5 or 6 years. Each transaction is normally secured by Letters-Of-Credit.
Hence, it makes sense to discuss our alternative funding solutions as you may increase your liquidity by shortly.
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