FORFAITING
The forfaiting is an operative for the exporting company sold outright to a bank a payment internationally accepted document, letter or note, which recognizes a right of recovery in an operation led international sale.
The forfaiting is often used in transactions with high risk countries (developing countries or countries with political or economic instability). Operations are hardly find other funding.
Because of this high irrigation, the financial institution that acquires financial effects normally require that these be supported (importer's bank or a third party).
The forfaiting has similarity with factoring, but also has certain distinctive features:
In forfaiting are assigned drafts or notes (with enforceable documents, in case of default are legally claimable by an accelerated procedure), while factoring invoices are transferred.
In forfeiting the exporter sells always sign this document, so that in case of default is the lender who takes the loss (that is the essence of this form), while factoring in the sales of the document is one of the possible services that can be contracted, but not required.
While in the forfaiting bills of exchange / promissory notes usually have a maturity of medium / long term (can reach 3/5 years), factoring invoices are usually short-term (90-120 days).
In forfeiting assignments are usually a limited number of effects, a very large amount and few customers, while factoring assignments are numerous bills, reduced unit amount and many customers.
The advantages of forfaiting:
Spot Collection.
Elimination of exchange rate risk (as it collects in cash).
Eliminating the risk of default.
Simplicity in the administration of foreign sales, since much of this work is taken over by the bank.

Therefore, the forfaiting is configured as a good measure of financing for the exporter to sell their credits to the credit