LC Forfaiting

Letter of Credit (L/C) forfaiting allows an exporter to receive up–front payment for selling L/C–based receivables at a discount on a non–recourse basis.

The exporter seeking to hedge the insolvency risk of the L/C issuing bank and the country risk of the importer and receive payment upfront may approach an advising bank to purchase the L/C–based receivables at discount, giving up the right to collect full payment in the receivables to the said bank.

Benefits of L/C Forfaiting

Risk hedging

  • Reduce non-payment risk while increasing the transaction volume with the importer under flexible payment terms
  • Shift insolvency risk of the L/C issuing bank to the advising bank

Improving balance sheets

  • Optimize balance sheets by taking the receivables off the balance sheet (please consult with your professional accountant)

Reducing management burden

  • Reduce the burden of collecting the receivables from the importer

Increasing competitiveness

  • Allow for prolonged or flexible payment terms for competitiveness, while reducing payment risk of importer.

Fatal error: Uncaught Error: Class 'Elementor\Scheme_Typography' not found in /home/customer/www/ Stack trace: #0 /home/customer/www/ Essential_Addons_Elementor\Extensions\Table_of_Content->register_controls(Object(Elementor\Core\DocumentTypes\Page)) #1 /home/customer/www/ WP_Hook->apply_filters(NULL, Array) #2 /home/customer/www/ WP_Hook->do_action(Array) #3 /home/customer/www/ do_action('elementor/docum...', Object(Elementor\Core\DocumentTypes\Page)) #4 /home/customer/www/ Elementor\Core\Base\Document->register in /home/customer/www/ on line 594