The use of a draft or promissory note given by the purchaser (guaranteed by purchaser's bank) to the exporter to obtain non-recourse financing is known as factoring.

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The use of a draft or promissory note given by the purchaser (guaranteed by purchaser's bank) to the exporter to obtain non-recourse financing is known as forfaiting, not factoring. Factoring involves the sale of accounts receivable to a third party at a discount for immediate cash.

The Use of a Draft or Promissory Note Given by the Purchaser