How Do You Spell FORFEITING?

1. Forfeiting is a financial service or mechanism that involves the selling of medium to long-term trade receivables or financial instruments known as forfeited bills. It is a form of short-term financing or factoring that enables exporters to receive immediate cash for their export sales rather than waiting for the payment from the buyers.

   In this process, an exporter who sells goods or services on credit terms transfers their trade receivables to a forfeiting institution or a financial factor called a forfeiter. The forfeiter analyses the credit worthiness of the buyer and pays the exporter the present value of the receivables, deducting a discount and taking on the risk associated with the buyer's potential default. Instead of the exporter waiting for the buyer's payment, the forfeiting institution takes over the collection of the receivables and assumes the responsibility for any non-payment by the buyer.

   Forfeiting is often utilized in international trade transactions where there is a long payment term involved, typically over two years. It allows exporters to obtain immediate funds for working capital requirements or to reinvest in their businesses. It provides a degree of certainty and stability to exporters by mitigating the risks associated with international trade, such as political, economic, or commercial risks. Overall, forfeiting provides an effective financial solution for exporters who want to convert their account receivables into cash flow and reduces their exposure to payment defaults.

Top Common Misspellings for FORFEITING *

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Other Common Misspellings for FORFEITING

The word "forfeiting" originated from the Middle English term "forfeten", which was derived from the Old English word "forfeitan". "Forfeitan" is a combination of the prefix "for-" meaning "completely" or "utterly" and "feitan" meaning "to lose possession of" or "to be deprived of property". The Old English root can be traced back to the West Germanic word "frakjanan", meaning "to pledge" or "give up", which is also related to the Old High German word "firfeitōn".

Similar spelling words for FORFEITING

Plural form of FORFEITING is FORFEITINGS

Conjugate verb Forfeiting

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