What Information does an Exporter need to Supply to a Forfaiting Lender?

Exporter and Importer Information

In order assess your international trade transaction and make an initial approach to a forfaiting lender on your behalf, we will need to know basic details about the deal. The more details you can give the more accurate a quote we can obtain, we always recommend early contact (especially for complex transactions!) so we can confirm finance availability, documentation required, likely credit periods and cost of finance.

Initially we will require
the details of the exporter and importer;
the nature of the goods being sold;
The shipment schedule;
the value of the contract and via which currency;
the completion date, length of contract and any agreed credit period plus payment schedule that may or may not include an interest arrangement;
the trade instrument to be used e.g. "Bill of Exchange", "Letter of Credit", "Promissary Note";
the name of the bank or institution who will act as the "Avalor" or "Guarantor" of the payment.

Exporter Documentation

The typical documentary requirements for forfaiting lenders are as follows:-

• A signed copy of the commercial invoice.
• The contract to supply, to include any payments terms.
• Copy of all shipping documentation such as a "bill of lading" etc.
• Notification to the guarantor plus letter of assignment.
• The Aval or "Letter of Guarantee".

Ideally trade instruments should be negotiable, they should be assignable (transferable), irrevocable and unconditional.

Note: Any guarantor will need to be acceptable to the forfaiting lender therefore early contact is advisable.

The evidence of debt will support your application, once the forfaitor is in place you will not need to spend any time administering the financial part of the transaction. Best of all due the the non-recourse aspect you become free from the risk of non-payment, currency movements and even political risks!