The financing provided to customer after the goods has been delivered until the payment of export invoice. The focus is for immediate payment, therefore the Exporter does not have to wait the payment from Importer.
The risk of this type of payment is more on the destination country of export, which among other:
- Buyer/issuing Bank which has problem in the payment
- The risk of stability in the Importer country
- The risk of inconformity of the document
There are some types of financing of this kind, which are:
1. Export Receivables Negotiation
Take over or purchase of money order/bill/export document based on L/C
2. Export Receivables Discounting
Payment or financing for the export receivables before due date.
Forfeiting is a provision of fund by a company (Forfeiter) to other company or exporter by purchasing the goods previously sold by the client (Exporter) to the buyer but the client has not received the payment. Usually importer will obtain credit until the period of seven years to come.
The sale of account receivables from the exporter to the factoring company to obtain cash by paying certain commission. Usually exporter will receive the payment in amount of 75%-85%.
5. Banker Acceptance
Acceptance instrument used by the bank on a withdrawal of money order of usance L/C.