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Common transaction flow under buyer’s
credit scheme
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| 1 |
Prior to its negotiations with an importer, we recommend
to an exporter to contact NLBI and request the pricing for financing
the relative risk over the requested payment term, in order to get
the financing cost properly calculated and built into the contract
value. |
| 2 |
Upon signing of the sales contract, the exporter should
ask NLBI for a firm written commitment which is from a security (legal)
point of view comparable to a confirmed letter of credit. Such written
commitment contains conditions precedent to the without recourse purchase
of subject claims and fixes the financing cost involved. |
| 3 |
By now the exporter should receive the contractually
stipulated security from the importer/his house bank in exchange for
granting a suppliers credit. After its receipt the exporter can start
the production of the goods. |
| 4 |
When goods are ready for shipment the exporter has
to present the documents to the importer (through letter of credit;
documentary collection, etc.) in accordance with the underlying instrument. |
| 5 |
A conformed copy of documents (i.e. a copy of the original
that contains the words "certified true copy” or "conformed
copy” and which is duly signed on each page) required under
the forfaiting contract has to be send to NLBI together with a set
of assignment and notification letters. Documentation varies from
transaction to transaction, however. |
| 6 |
After receipt of the acknowledgement of the assignments
from the relevant counterparties involved, NLBI will discount the
receivables and disburse funds without recourse in favour of the exporter. |
| 7 |
Now a legal relationship exists between NLBI and obligor/importer’s
house bank. NLBI will collect funds at maturity under the relevant
payment instrument as it is duly entitled to receive such payment. |
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