Forfaiting is a method of trade finance whereby the forfaiting insitute purchases, on a without recourse basis, unconditional debt obligations arising from the supply of goods or services.
It can be possible to finance up to 100% of the contract value as a stand alone finance package and also when it's made up from a conjunction with the cover of the Export Credit Agencies (ECA’s) such as SACE, HERMES, COFACE.
It can be used to finance the uncovered portion of the transaction, including the down payment.
The operations generally has a tenor between one and five years. The minimum size for a Forfaiting transaction is about EUR 100.000.