International Settlement 5.pptVIP

* * 1. Definition Forfeiting is the term generally used to denote the purchase of obligations falling due at some future date, arising from deliveries of goods and services, mostly export transactions, without recourse to any previous holder of the obligation. ①100 percent financing-Without recourse and not occupying exporter’s credit line. That is to say once the exporter obtains the financed fund, he will be exempt from the responsibility to repay the debt; ②Improve cash flow-receivables become current cash inflow and it is beneficial to the exporter to improve financial status and liquidation ability so as to heighten further the fund raising capability; 2. Characteristics ③Save administration cost- by using forfeiting, the exporter will spare from the management of the receivables. The relative costs, as a result, will be reduced greatly; ④Advanced tax refund-using BOC forfeiting service, the exporter can make the verification of export and thus get the tax refunded in advance just after financing; ⑤ Evade various risks-forfeiting business enables the exporter to transfer various risks resulted from deferred payment, such as interest-rate risk, currency risk, credit risk and political risk; ⑥ Increase trade opportunity-with forfeiting, the export is able to grant credit to his buyer freely, and thus, be more competitive in the market; ⑦ Realize price transfer-the exporter can also transfer the corresponding financing cost into the sale price. ①To improve financial status and want to thoroughly remove the export receivables from the balance sheet; ② In case of other investment opportunity before the receivables get paid and the expected returns is higher than all the forfeiting charges; ③ In case of short of working capital and other types of financing on a recourse basis are not preferable. 3. When to use Forfeiting 4. Procedure of Forfeiting ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????