Forfeiting
Forfeiting (also export factoring) is a form of financing where receivables that are due at a future date (from export business) are sold to a bank or a financial institution without recourse. ‘À forfait’, means that forfeiter assumes all commercial and political risks – without recourse claims against exporter. Seller is only liable for the claim having due validity.
Seller achieves through forfeiting the immediate disbursement of the granted payment term, thus improving his liquidity and unburdening his balance sheet. The claims are usually represented by bills of exchange. In leasing, forfeiting corresponds to nonrecourse Factoring.