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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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