Banking · Trade Finance
In trade finance, forfaiting differs from factoring primarily because forfaiting involves:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1the purchase of short-term receivables that are always handled on a recourse basis.
- 2the purchase of medium to long-term trade receivables on a non-recourse basis.✓
- 3a direct equity investment by a commercial bank into the exporter's business operations.
- 4a government-funded subsidy provided to importers to lower the cost of essential goods.
Correct answer
the purchase of medium to long-term trade receivables on a non-recourse basis.
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