Financial
International Factoring
Financing where a financial entity (factor) purchases the exporter's receivables at a discount, providing immediate liquidity. The factor assumes the collection risk from the foreign importer.
Financing where a financial entity (factor) purchases the exporter's receivables at a discount, providing immediate liquidity. The factor assumes the collection risk from the foreign importer.
The exporter sells invoices to the factor (bank or financial company) at a 2-5% discount. Receives immediate liquidity without waiting 30-90 days for trade credit. The factor collects from the importer.
Letter of Credit (L/C)
Payment instrument issued by a bank at the importer's request, guaranteeing the exporter payment if documentary conditions are met. The primary payment mechanism in international trade.
FinancialDocumentary Collection
Payment mechanism where the exporter's bank sends shipping documents to the importer's bank, releasing them against payment (D/P) or acceptance (D/A). Cheaper than a letter of credit.
DocumentsCommercial Invoice
Document issued by the seller/exporter describing the goods sold, their price, terms of sale, and details of the parties involved.
FinancialForfaiting
Non-recourse purchase of credit instruments (bills of exchange, promissory notes) from medium/long-term export transactions. The forfaiter assumes all political and commercial risk.