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Forfait Financing: Turning Receivables into Cash
Forfait financing, or forfaiting, is a trade-finance solution that allows an exporting company to sell its receivables without recourse to a forfaiter (often a financial institution or specialized broker). This technique converts a medium-term receivable—documented by a bill of exchange or a promissory note—into immediate cash while transferring the non-payment risk.
The forfaiter purchases these negotiable instruments at an agreed discount rate, deducts interest and fees, and immediately pays the net amount to the exporter. This is typically used for cross-border transactions where the receivable is guaranteed by an importer’s bank or an export credit agency (such as SERV in Switzerland).
Simplified Forfaiting Mechanism
1. The exporter delivers the goods or services to the importer.
2. The importer issues a bill of exchange or a promissory note, accepted and guaranteed (avalized) by a bank.
3. The exporter sells this receivable to the forfaiter.
4. The forfaiter immediately pays the exporter (minus the discount).
5. At maturity, the forfaiter collects payment from the importer or the guaranteeing bank.
Exporter → Importer
| |
| Delivery |
|---------------->|
| |
| Promissory Note / Bill of Exchange
|<----------------| | | | Assignment of the Receivable |---------------->|
| |
| Immediate Payment (less discount)
|<----------------|
|
[FORFAITER / PRESTAFLEX]
|
| Collection at maturity from the guaranteeing bank
Advantages of Forfaiting
- Immediate liquidity: converts medium-term receivables (often 6 months to 5 years) into cash.
- Risk transfer: commercial, political, transfer, and currency risks are shifted to the forfaiter.
- Stronger balance sheet: receivables are sold without recourse, come off the balance sheet, and improve liquidity and leverage ratios.
- Flexibility & discretion: no visible bank debt recorded on the liabilities side.
- Competitive tool: lets the exporter offer longer payment terms to foreign buyers.
Risks Covered
Forfaiting typically covers political risk (buyer’s country instability), transfer risk (currency payment blockages), force majeure, FX risk (currency fluctuations), and del credere risk (buyer insolvency).
Why Work with PrestaFlex
PrestaFlex acts as an independent professional intermediary between exporting companies, forfaiters, banks, and specialized insurers.
Thanks to its international network and expertise with complex financial instruments, PrestaFlex helps to:
- Identify the best-suited forfaiter based on the contract, buyer country, and currency,
- Structure the documentation (promissory note, bill of exchange, bank guarantees, export-credit insurance),
- Optimize discount rates and fees,
- Secure the transaction within the Swiss legal and regulatory framework (CDB 20 and FINMA standards).
PrestaFlex thus supports companies with end-to-end risk transfer and financing, strengthening their competitive position in international markets. This tailored approach is especially valuable in a context where, according to the SECO/IFZ 2021 study, nearly one in six SMEs struggles to obtain a traditional bank loan. Forfaiting becomes an effective, non-restrictive alternative.
In Summary
Forfaiting is an elegant instrument: it combines security, liquidity, and efficiency while freeing companies from banking constraints.
As a specialized broker and advisor, PrestaFlex structures these transactions with rigor, transparency, and compliance—turning international trade into a controlled growth opportunity.
An article by Munur Aslan, Managing Director at PrestaFlex
See also our articles Corporate financing Zurich and Corporate financing Geneva for a broader perspective.
Forfait Financing: Turning Receivables into Cash
Forfait financing, or forfaiting, is a trade-finance solution that allows an exporting company to sell its receivables without recourse to a forfaiter (often a financial institution or specialized broker). This technique converts a medium-term receivable—documented by a bill of exchange or a promissory note—into immediate cash while transferring the non-payment risk.
The forfaiter purchases these negotiable instruments at an agreed discount rate, deducts interest and fees, and immediately pays the net amount to the exporter. This is typically used for cross-border transactions where the receivable is guaranteed by an importer’s bank or an export credit agency (such as SERV in Switzerland).
Simplified Forfaiting Mechanism
1. The exporter delivers the goods or services to the importer.
2. The importer issues a bill of exchange or a promissory note, accepted and guaranteed (avalized) by a bank.
3. The exporter sells this receivable to the forfaiter.
4. The forfaiter immediately pays the exporter (minus the discount).
5. At maturity, the forfaiter collects payment from the importer or the guaranteeing bank.
Exporter → Importer
| |
| Delivery |
|—————->|
| |
| Promissory Note / Bill of Exchange
|<—————-| | | | Assignment of the Receivable |—————->|
| |
| Immediate Payment (less discount)
|<—————-|
|
[FORFAITER / PRESTAFLEX]
|
| Collection at maturity from the guaranteeing bank
Advantages of Forfaiting
- Immediate liquidity: converts medium-term receivables (often 6 months to 5 years) into cash.
- Risk transfer: commercial, political, transfer, and currency risks are shifted to the forfaiter.
- Stronger balance sheet: receivables are sold without recourse, come off the balance sheet, and improve liquidity and leverage ratios.
- Flexibility & discretion: no visible bank debt recorded on the liabilities side.
- Competitive tool: lets the exporter offer longer payment terms to foreign buyers.
Risks Covered
Forfaiting typically covers political risk (buyer’s country instability), transfer risk (currency payment blockages), force majeure, FX risk (currency fluctuations), and del credere risk (buyer insolvency).
Why Work with PrestaFlex
PrestaFlex acts as an independent professional intermediary between exporting companies, forfaiters, banks, and specialized insurers.
Thanks to its international network and expertise with complex financial instruments, PrestaFlex helps to:
- Identify the best-suited forfaiter based on the contract, buyer country, and currency,
- Structure the documentation (promissory note, bill of exchange, bank guarantees, export-credit insurance),
- Optimize discount rates and fees,
- Secure the transaction within the Swiss legal and regulatory framework (CDB 20 and FINMA standards).
PrestaFlex thus supports companies with end-to-end risk transfer and financing, strengthening their competitive position in international markets. This tailored approach is especially valuable in a context where, according to the SECO/IFZ 2021 study, nearly one in six SMEs struggles to obtain a traditional bank loan. Forfaiting becomes an effective, non-restrictive alternative.
In Summary
Forfaiting is an elegant instrument: it combines security, liquidity, and efficiency while freeing companies from banking constraints.
As a specialized broker and advisor, PrestaFlex structures these transactions with rigor, transparency, and compliance—turning international trade into a controlled growth opportunity.
An article by Munur Aslan, Managing Director at PrestaFlex
See also our articles Corporate financing Zurich and Corporate financing Geneva for a broader perspective.
Special Situations & Distressed Debt