Caterpillar Tractor sells heavy construction equipment to a Polish firm. In return, the Polish firm issues a promissory note to Caterpillar promising to pay for the equipment over a five?year period. Caterpillar sells the note to Deutsche Bank at a discount. Caterpillar has used

Question

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Caterpillar used forfaiting, which involves selling a promissory note or other payment obligation at a discount to a third-party, often a bank. This allows the seller to receive immediate cash for the transaction instead of waiting for the payment to be made over time.

Caterpillar Tractor Sells Heavy Construction Equipment to a Polish Firm