Financial Markets & Instruments: Factoring and Forfeiting

The main problem nowadays when trading with foreign countries is to obtain payments from importers. This paper focuses on how the two major innovative tools of financing viz: Factoring and Forfeiting helps the Financing companies to offer financial support to traders in exchange for fees, and guarantees and the problems they faced. For the exporter, both of these methods maximize cash flow, reduce transaction risks, and may enhance competitiveness by offering flexible payment terms to the buyer.