Founded on Tradition, Driven by Knowledge
The origins of forfaiting (a French word meaning “to relinquish a right”) can be traced back to the activities of Dutch merchants in the 1660s. At the time, much of the trade to and from Amsterdam was conducted by commission merchants, that is agents who sought out customers but did not own the commodities in which they traded. This enabled them to trade with much reduced capital requirements and introduced them to shipping agency and acceptance credit, a most important development in the history of international trade.
Acceptance credits developed to address the need of smaller merchants finding their way into international trade having to ask established houses to endorse their trade bills so as to make them acceptable at home and abroad. The long established practice (which continues today) is for the importer to draw a 3 months or 6 months bill of exchange on its accepting house. The bill matures when payment becomes due from the customer. The accepting house concerned receives the bill and may hold it to maturity or (as increasingly happened during the course of growing specialisation) discount it with one of the increasing number of financial intermediaries. When the bill matured the importer’s remittance was paid directly to the accepting house for the account of his customer.
LGF was created with the intention of providing traditional merchant banking services and tailor making the service to apply to the vastly different needs of our clients.
Using our own balance sheet we are able to convert your receivables into cash thereby freeing up your balance sheet to do other transactions.