FAQs

Your receivables are guaranteed: In the business world, one of the biggest risks faced by companies is undoubtedly the collection of receivables. However, when you work with the factoring system, the service provided under guarantee frees you from this risk. You ensure a steady cash flow: In factoring, you can convert your receivables into cash whenever needed, generating financing and securing a regular cash flow. Your working capital increases, and your balance sheet becomes more liquid. You gain a strong intelligence resource: Thanks to reliable intelligence data, you have up-to-date information on the financial strength and market credibility of your customers and buyers. This helps you build a high-quality customer portfolio with minimal collection risk. Your time is your own: Customer credit checks, collections and follow-ups, credit-related procedures, and cash flow issues—factoring frees you from all of these. You can focus your time and energy on growing your business. You save money: With factoring, the workload and follow-up responsibilities of your accounting department are reduced. Additionally, the financing you obtain allows you to make cash payments to suppliers, benefiting from discounts, strengthening your position, and reducing production costs. You gain financial strength: Factoring is a type of financing that provides funds based on your own receivables. It shortens your collection period and strengthens your capital. You are freed from burdens related to borrowing. Your company gains a more robust financial structure, allowing you to invest with your own resources and grow your business more easily.

Tera Finans Faktoring does not discriminate between customers and provides services regardless of scale differences. Tera Finans Faktoring offers fast and definitive solutions tailored to your needs and enables a steady cash flow. Tera Finans Faktoring develops solutions specific to the sector and needs with an innovative perspective. With Tera Finans Faktoring, you know your exact cost, allowing you to save. Tera Finans Faktoring offers high-quality service with flexible solutions to meet your expectations and aims for long-term cooperation.

Factoring services were first used in the 14th century in England during the sale of wool products to various countries. At that time, British exporters, by providing guarantees that buyers would make payments, sold their receivables to financial institutions called “factors.” Considering the limited economic relations and especially the restricted communication infrastructure of that era—along with the scarcity of trustworthy representatives abroad—factor institutions played a highly significant role in foreign trade. This importance grew rapidly over time. With the Industrial Revolution, factoring activities became widespread, especially after the 18th century, as industrial production and trade expanded. The system gained further importance in the 1960s, following the post-World War II reconstruction period in Europe. Particularly after the 1970s, due to the oil crises, many companies sought to expand their sales opportunities, leading to the rapid spread of factoring. It gained a broad field of application. While initially used in a few countries such as the UK and the US by manufacturing companies facing major sales issues, factoring has now become a widely demanded financing technique worldwide for small, medium, and even large-scale companies engaged in both domestic and international trade. Today, factoring is used extensively around the globe—especially in European countries—and grows by approximately 20% annually. According to the latest data from Factors Chain International (FCI), headquartered in the Netherlands, with 229 members in 62 countries and an annual turnover of €758.3 billion, the global factoring transaction volume in 2007 reached €1.299 trillion. Among this, the 229 FCI members in 62 countries accounted for 59% of the total, with regional breakdowns as follows: Europe 71.5%, the Americas 11.5%, Asia 13%, and other countries 4%. According to FCI’s annual reports, the Turkish factoring sector currently ranks 9th in Europe in terms of market size. Looking at the development of the sector in Turkey, the first factoring initiative took place in 1988. Following the establishment of the first factoring company in 1990, the sector grew rapidly over the next 19 years, reaching a transaction volume of $27 billion by 2008. Until 2006, the sector operated under the authority of the Undersecretariat of Treasury, but as of January 1, 2006, its regulation and supervision were transferred to the Banking Regulation and Supervision Agency (BDDK). Today, 80% of factoring transactions in Turkey are domestic, while export factoring accounts for the remaining 20%. Turkey holds an internationally significant position in export factoring. According to FCI reports, Turkey ranks second after China in terms of export factoring volume.

There are three parties involved in a factoring transaction with a forward sale. The buyer (debtor), the seller, and the factoring company. After the buyer notifies the seller of his order, the seller company transmits information about the buyer to the factoring company. The factoring company investigates the creditworthiness of the buyer and informs the seller of the limits and conditions that can be allocated. A contract is signed between the seller and the buyer, and the products are shipped. The seller also forwards a copy of the invoice sent to the buyer to the factoring company. The factoring company makes an advance payment to the seller within the framework of the contract and the specified rates. The factoring company collects the invoice amount from the buyer on the due date and pays the remaining balance to the seller.

Factoring can be used in any area where trade takes place. The key requirement is that a deferred (term) sale must occur. It is particularly a suitable financing model for SMEs (Small and Medium-sized Enterprises).

The fees that may arise in factoring transactions, depending on the terms of the agreement, are as follows: Commission: The fee charged by the factoring company to the seller in return for the services provided. Interest: The amount payable by the seller if they utilize the prepayment facility. Expenses: Costs incurred by the factoring company on behalf of the seller, such as postage, wire transfers, EFT, etc. BSMV (Banking and Insurance Transactions Tax): Legally, income generated from factoring services is subject to BSMV. However, this fee is not applied to transactions that generate foreign currency inflow. There are two main costs in factoring: the factoring commission and the factoring fee. The factoring fee is charged only if you utilize the financing service. The commission is calculated based on the assigned receivables and varies depending on the transaction volume and the maturity of the receivable.

Yes. Receivables from companies operating on an open account basis can be transferred to the factoring company through a factoring agreement. When issuing the invoice, it is sufficient to notify the buyer company with a note indicating the situation and stating that the payment should be made to the factoring company.

According to the relevant legislation, receivables that are subject to factoring must be based on an invoice or a similar document.

Under normal circumstances, buyer company approval is not required to use factoring. However, it is necessary to notify the buyer in writing that the receivable will be collected through the factoring company.

Yes. It is possible to use factoring solely for collection and receivables management and/or the guarantee function, without utilizing the financing feature. The choice is entirely up to you.

Recourse factoring is a type of factoring where the factoring company does not assume the risk of non-payment of the receivable. In this model, financing and collection services are provided, but the seller remains responsible if the buyer fails to pay. Non-recourse factoring, on the other hand, means that the factoring company assumes the risk of non-payment, within the pre-defined limits and conditions set at the beginning of the agreement.

The prepayment amount you can receive is determined based on the maturity of the receivables you assign, your transaction volume, and the creditworthiness of those receivables.

One of the main reasons a guarantee may become invalid is if the goods are defective or if goods different from those ordered by the buyer are delivered. Additionally, for the guarantee to remain valid and in effect, it is essential to comply with the assigned limit conditions, adhere to international factoring rules, and fulfill the terms of the contract or purchase order made with the buyer company.

In bank loans secured by promissory notes, the notes serve as collateral for the loan and continue to be recorded under notes receivable on the asset side of the balance sheet. The corresponding loan is reflected as a financial liability on the liabilities side. In factoring transactions, however, the promissory note is directly linked to the invoice and represents the receivable itself. The assigned receivable amount is removed from notes receivable on the balance sheet, converted into cash, and is not recorded as a financial liability.

This matter depends on the agreement between the client and the factoring company. Legal proceedings can either be initiated by the client or, alternatively, by the factoring company—provided that the associated costs are borne by the client.