Forfaiters will ensure that the buyer, not the seller incurs chargers involve change to the structure of deals concluded, but Forfaiters stress their flexibility in tailoring deals to suits the exporter's needs. In effect, this covers for Forfaiter's refinancing costs and is invariably based on the cost of funds in the Euromarkets. This is referred to as the margin, and it varies from country to country, and guarantor to guarantor. Days of grace are an additional number of days interest charged by the Forfaiter which reflect the number of days delay normally experienced with payments made from the debtor country. Many houses claim that exporters get 100 per cent finance in about two days after presentation of the proper documents.
Practices vary between houses.
The Forfaiter will also charge for 'x' days grace and a fee for committing himself to the deal, worth 'y' percent. Some exporters prefer to work with Forfait brokers who, because they deal with a large number of Forfait houses, can assure the exporter of competitive rates on a timely and cost effective basis. This is a onetime fee on the principal amount and frequently is added to the selling price by the exporter. It should be remembered, that Forfaiting is a complementary method of finance to officially supported export credits. Forfaiting allows the exporter greater flexibility in structuring a deal.