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Evaluating the End-Buyer

  • Stephen A. Jones
Chapter

Abstract

Trade and receivables finance is based upon the commitment of the end-buyer to purchase goods and the identification and capture of a reliable transactional source of repayment. Open-account trade relies upon the ability of the end-buyer to pay the sales invoice. This can be impacted upon by the solvency of the end-buyer, the political and transfer situation of their country, and the enforcement and collectability of the debt. The risk evaluation of the end-buyer and their country is described, to include the financial statement assessment and payment history of the end-buyer, the use of credit reference agencies, status reports, and other sources of information to include a bank’s own invoice finance and correspondent banking departments. The importance of the end-buyer’s bank in the process of evaluation is also discussed.

Keywords

Bank or institutional risk Collectability of debt Credit reference agencies End-buyer risk evaluation Financial statement assessment Political risk Risk assessment Transfer risk 

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Stephen A. Jones
    • 1
  1. 1.AXS Trade Finance Ltd.Solihull, West MidlandsUK

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