Benefits of Forfaiting Beneficios del Forfaiting

Abstract

This article exposes the benefits of Forfaiting, as a financing instrument for international trade, its definition, operating mechanisms, advantages and disadvantages, as well as its regulations in the International Chamber of Commerce.

Forfaiting is a very little-known financing tool and at the same time very beneficial for all exporters and importers who use a Letter of Credit as a means of international payment.

The benefit for exporters is improved liquidity, reduced risk of non-payment, improved negotiation capacity; For importers, a longer payment period is obtained, their cash flow (liquidity) improves and the cost of financing is reduced.

A status is also presented of how the financial tool of Forfaiting is growing. A study of articles related to Forfaiting is carried out, as well as a procedure on how to access financing.

A brief and concise description of the financing process, requirements and operation in banking entities is also presented.