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Q » Explain factoring and forfaiting.
06 Dec, 2025
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A » Factoring is a financial transaction where a business sells its accounts receivable to a third party, called a factor, at a discount to improve liquidity. Forfaiting, on the other hand, involves the purchase of an exporter’s receivables, typically medium- to long-term, by a forfaiter, which provides the exporter with immediate cash flow while transferring credit risk to the forfaiter. Both methods enhance cash flow but differ in terms and scale.
06 Dec, 2025
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