Forfaiting
Forfaiting (based on the French “ à forfait,“ lock, stock and barrel, without recourse)
describes the purchase of claims with a rejection of recourse against the seller in case of
non-payment (proper forfaiting). However, the seller is, of course, liable for the legality of the
claim.
In the case of improper forfaiting, on the other hand, recourse is not ruled out.
The seller of the claim becomes the “forfaitist“ and the buyer the “forfaiteur.”
Forfaiting is increasingly gaining in significance in the financial processing of export
business. Factoring and forfaiting as financing possibilities are important for medium sized
companies in particular, since external financing through bank credits due to the intensified
international competition is becoming more and more difficult due to Basel II. There are
interesting developments in the area of asset financing of total assets in the balance sheet in
this area too.
Good to know
Factoring involves sales and not credit. It describes the continuous purchase of short term, future claims form the supply of goods and services as well as their management, accounts receivable accounting, dunning and collection system.