- Definition

- Forfaiting versus factoring - some similarities, many differences

- Comparison with other commercial funding markets - commercial paper, bonds, corporate loans etc

 - Which banks and forfaiting houses have forfaiting operations?  Market participants - members of IFA.  Types of participant, traders, lending banks, banks with country expertise, domestic banks with significant market shares among local medium and large businesses eg large British, French, German and Italian banks.

- Trade-related versus financial paper - the pros & contras

- "Introduction to the Primary Forfaiting Market" and the "IFA Guidelines" - a well-governed market.

- What are the advantages and disadvantages to exporters and importers of using forfaiting?

Exporters - advantages:  selling to riskier markets / selling on credit / ability to offer finance / flexibility towards customer's circumstances / payment upon shipment / avoiding becoming the customer's banker / forfaiter's commitment in advance of shipment /  relative ease of dealing with a commercial market rather than an export credit agency / sourcing from more than one market / 100% finance.

Exporters - disadvantages:  Having to deal with banks / having to get to grips with esoteric forfaiting jargon, calculation and market / perceived risk as compared with dealing with one's clearing bank / payment of fees 

Importers - advantages:  extended credit terms to match cash flow, gaining credit outside conventional credit lines, configuring transaction to suit needs, perhaps tax driven structures for example.

Importers - disadvantages:  Having to deal with banks / having to get to grips with esoteric forfaiting jargon, calculation and market / perceived risk as compared with dealing with one's clearing bank / payment of fees. 

To earn fees and commissions / to earn trading margin / to diversify risk / to harness skills such as emerging market knowledge, trade finance expertise, treasury skills / to earn a lending margin / to add a liquid asset class to bank's over all spread of business lines / to provide value added services to their customers alongside lower return business such as corporate lending.

Commerical risk - corporate risk of non-payment

Political risk - country risk

Performance risk - exporter / importer / guarantor / counterparty risk

Commodity risk - risk of price change in underlying traded goods

Shipment risk - risk to goods in transit

Documentary risk - poor, incomplete or fraudulent documents

Pricing risk - that exporters and/or forfaiters mis-price a (worsening) risk

Currency risk - for exporters / importers / forfaiters

Interest rate risk - for forfaiters

Bank risk - banks can default, fail or make mistakes too...