- Owner
- Buyer
- Bank
- Nominated forfaiting bank
- Basis
- Without recourse to the supplier
- Priced on
- Buyer or guarantor standing
Why a buyer would start a forfaiting program
A supplier selling on extended terms wants the receivable gone — sold, not pledged. A buyer wants those terms without watching its supply base run out of cash. A reverse forfaiting program serves both: the buyer stands the program up, and the forfaiting bank purchases suppliers’ receivables without recourse, pricing against the buyer rather than each supplier.
For the supplier the effect is the same as any forfaiting: the receivable leaves the balance sheet, the credit risk goes with it, and the sale is settled. The difference is that the buyer’s standing sets the discount, and the paperwork is agreed once at program level.
The program carries what the bank needs before any purchase can happen: buyer details, supplier details, the beneficiary accounts proceeds are paid into, and the document list each purchase must satisfy.
The shape of the flow
Buyer-led, without recourse. The buyer stands the program up and its suppliers are bought out, priced against the buyer rather than themselves.
How it works on TradeOrigin
Start the program, complete its details, then purchase against it.
Start the program
The buyer creates it and nominates the forfaiting bank that will purchase.
Add buyer and supplier details
The parties, their identifiers and their roles under the program.
Confirm beneficiary accounts
Where purchase proceeds are paid, per supplier, agreed before the first purchase.
Agree the document list
The set every purchase must present, so nothing is negotiated at the point of funding.
Purchase without recourse
Receivables are bought at the agreed discount; the bank collects from the buyer at maturity.
Who it is for
Program owner
You extend terms without starving your suppliers, and you deal with one bank instead of many supplier facilities.
Beneficiaries
Your receivable is bought without recourse, priced off your buyer, and settled into your nominated account.
Nominated purchaser
One buyer to underwrite, a defined document list, and a stream of purchases across its suppliers.
What you get
Without recourse for the supplier
A true sale — the receivable and its risk both leave.
Priced on the buyer
The discount reflects the buyer’s standing, not each supplier’s.
Documents settled in advance
The document list is agreed at program level, not argued about at funding.
Accounts confirmed up front
Beneficiary accounts are recorded before the first purchase, so proceeds are not held up.
What the bank will ask for
Uploaded once, against the deal, and visible only to the counterparties on it.
Questions
Is this the same as supply chain finance?
The direction is the same — buyer-led, priced on the buyer — but the mechanism differs: SCF finances payables, forfaiting purchases the receivable outright without recourse.
Who nominates the bank?
The buyer, when starting the program. The purchases then run through that bank.
Can suppliers be added later?
Yes. Supplier details and beneficiary accounts are added as the program grows.
Related
Forfaiting Program
A revolving without-recourse purchase facility for an exporter shipping repeatedly into the same market.
ProductForfaiting
Sell medium-term export receivables without recourse and take the risk off your balance sheet entirely.
ProgramSupply Chain Finance Program
The standing facility behind SCF: one program per buyer, its suppliers, its banks, their limits and charge terms.