Forfaiting Glossary:
Glossary items beginning with: s
SEM:
Single European Market.
Soft Loan:
A loan made at a concessional rate.
Standby Letter of Credit:
A credit which acts as a form of security for an advance, when a guarantee cannot be obtained, for example in the USA.
Straight Discount:
Expresses the discount rate as a percentage discounted from the face value of a specific future cash flow or maturity. This method, while generally simpler to calculate than, for example, a discount to yield, does not represent a true interest cost.
Supplier Credit:
A financing arrangement under which a supplier, which may be an exporter, extends credit to its buyer.
SWIFT:
Society for Worldwide Inter-Bank Financial Telecommunications.
Swing:
A term to describe the degree of imbalance which may arise on a bilateral clearing agreement.
Switch Trading:
The purchase by a third party in hard currency - but at a discount - of the imbalance which has arisen on a bilateral clearing agreement.