Legal Definitions - cambist

A cambist is a financial professional or broker who specializes in the buying and selling of specific types of financial promises, primarily promissory notes and bills of exchange. They act as an intermediary, facilitating transactions for these documents which represent a commitment to pay a certain sum of money at a future date.

Here are some examples to illustrate the role of a cambist:

• International Trade Financing: Imagine a company in Germany that has sold a large shipment of machinery to a buyer in Brazil. The Brazilian buyer issues a bill of exchange, promising to pay the German company the full amount in 90 days. The German company, however, needs immediate cash flow to cover its own operational costs. A cambist could step in, purchasing this bill of exchange from the German company at a slight discount. The cambist then waits the 90 days to collect the full payment from the Brazilian buyer, providing the German company with instant liquidity and taking on the risk and administrative burden of collection.

  This example illustrates a cambist facilitating international trade by providing immediate funds against a future payment promise, acting as a crucial link in the financial chain.

• Private Debt Liquidation: Consider a small business owner who sold a piece of commercial property and, as part of the deal, received a promissory note from the buyer. This note promises a lump sum payment in two years. If the business owner suddenly needs a significant amount of cash sooner—perhaps for an unexpected expansion opportunity or a personal emergency—they might approach a cambist. The cambist could offer to buy this promissory note from the business owner for a discounted amount, providing immediate cash. The cambist would then hold the note until its maturity date and collect the full payment from the original property buyer.

  Here, the cambist provides a way for an individual or business to convert a future promise of payment into immediate cash, essentially creating liquidity for a non-liquid asset.