Forfaiting involves the purchase of export receivables (like bills of exchange) by a forfaiter on a "without recourse" basis. It is typically used for medium to long-term export financing.

TReDS is an electronic platform for facilitating the financing / discounting of trade receivables of MSMEs through multiple financiers, helping them manage working capital.

In non-recourse factoring, the Factor assumes the credit risk. If the debtor fails to pay due to insolvency, the Factor cannot claim the money back from the seller (client).

Forfaiting is a specialized form of export finance involving the purchase of medium to long-term export receivables (deferred payment obligations) on a non-recourse basis.

TReDS brings together MSME sellers (to upload invoices), Buyers (to accept invoices), and Financiers (to bid and provide funding against invoices).

Ideally, the Factor advances about 80-90% of the invoice value immediately to the client. The balance (minus charges) is paid when the customer (debtor) makes the full payment.

International factoring typically involves two factors: the Export Factor (in the exporter's country) who handles the client, and the Import Factor (in the importer's country) who handles credit assessment and collection from the buyer.

Factors provide a comprehensive package including maintenance of the sales ledger, collection of dues from debtors, credit protection, and advisory services.

Financing on TReDS is "Without Recourse" to the MSME seller. Once the invoice is accepted by the buyer and financed, the financier takes the credit risk of the buyer. The MSME seller does not have to refund the money if the buyer defaults.

FCI is the global representative body for factoring and receivables finance. GRIF provides a legal framework for international factoring transactions.

Unlike traditional factoring where the supplier initiates the process to get funds, Reverse Factoring is buyer-led. A large buyer arranges a financing program with a bank/factor to pay its suppliers early (at a discount), improving the supply chain stability.

In Recourse Factoring, the client (seller) bears the risk of bad debts. In Non-Recourse Factoring, the Factor bears the risk if the customer fails to pay due to insolvency.

BillDesk is a payment gateway. The three RBI-licensed TReDS platforms are RXIL, Invoicemart, and M1xchange.

FCI is the global representative body for factoring. GRIF provides a uniform legal framework for international factoring transactions between export and import factors.

Domestic factoring usually involves a Single Factor who manages the receivables of the seller and collects from the buyer within the same country.

In Undisclosed Factoring, the buyer is not aware of the factoring arrangement. The seller collects the payment in the usual course and passes it to the factor.