What is Factoring?
Factoring is a complete financing method that combines guarantee, receivables and collection management and financing services by assigning the domestic and international deferred receivables of companies arising from the sales of goods and services by the factoring company.
Guarantee Service: In open account (against goods) transactions, it is a guarantee process provided to the buyer company within the limits given to the buyer company in case the buyer company falls into insolvency. This service can only be applied in irrevocable transactions.
Collection and Receivable Management: Since the receivables are transferred to the factoring company through assignment, collections are made through the factoring company. Thus, the factoring company also undertakes the receivables management.
Financing: It is the payment of the receivables within the limit to the seller company by the factoring company at a certain prepayment rate before the forward date.