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Trade credit insurance

Trade credit insurance pays an exporter most of an unpaid invoice when a foreign buyer fails to pay for a covered commercial or political reason. The exporter pays a premium and keeps a small share of each loss.

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Invoice discounting

Invoice discounting lets a seller sell its unpaid invoices to a finance provider and get the discounted value early, while it keeps running its own customer accounts. The buyer pays on the due date, and the deal can stay confidential.

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Factoring

Factoring lets an exporter sell its unpaid invoices to a factor and get around 80% of the value up front, with the rest when the buyer pays. With non-recourse factoring, the factor also takes the risk that the buyer cannot pay.

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Forfaiting buys an exporter's future payment claims outright, with no recourse to the exporter

Forfaiting is the without recourse purchase of future payment obligations, such as bills of exchange, promissory notes and letter of credit obligations. The advance is normally 100 percent of face value less finance charges.