Frequently Asked Questions
Who can benefit from factoring services?
All enterprises dealing with domestic and international trade can benefit from our services. There are no criteria of balance sheet size or turnover.
Can I get information about the law which regulates factoring transactions?
Factoring operations are regulated under “Financial Leasing, Factoring and Finance Companies Law promulgated in Official Gazette number 28496, dated 13.12.2012; and relevant regulations.
What are the services offered by factoring?
Financing:Payment of a certain percentage of the receivable assigned to the factoring company to the supplier company before maturity. Guarantee: Undertaking of the debtor’s non-payment risk by the Factor in accordance with the provisions of the factoring agreement. Collection: Providing to the customer the tracking, collection and reporting of the receivable at maturity.
Do I have to use the financing, guarantee and collection services offered by factoring all at once?
No. You can receive all these services together, or you can benefit from them individually.
How would the factoring transaction create a finance source for our company?
When you use factoring for your receivables arising out of the sales on account, you can find a solution to your cash needs by means of funding a certain percentage of the receivable amount, without waiting for maturity.
What kind of a collection advantage would the factoring transaction provide to our company?
Garanti BBVA Factoring makes the collection of the receivables that it takes over. Garanti BBVA Factoring makes a timely collection of your receivables via its specialized staff in the country and an extensive correspondent network abroad; and transfers information if requested, with tailored reports.
What kind of a guarantee does the factoring transaction provide for our overseas receivables?
Within the guarantee limits received from its overseas correspondents, Garanti BBVA Factoring undertakes the non-payment risk to arise out of insolvency of buying companies to whom you sell goods; and pays the guarantee amount under the agreement conditions after the 90th day following maturity.
How is the guarantee limit identified for export transactions? In which situations is payment made under guarantee, and in which situations is payment not made?
Guarantee limits are identified according to the financial standing and payment practices of buyers. Guarantee is applicable for the terms described in the agreement and in the limit approval notice form. Guarantee conditions lose validity in any dispute with your buyer concerning goods and services.
Through which institutions and how does Garanti BBVA Factoring carry out the investigation about buyers for export and domestic transactions?
Investigations are carried out via Garanti BBVA Factoring’s correspondents abroad, and through other cooperating financial institutions in the domestic market.
How long does it take to make limit studies for buyers in export transactions?
Garanti BBVA Factoring’s investigations in foreign markets are aimed to be finalized within one or two weeks on average.
Can we extend the maturity date for our buyers via factoring?
Since you will be able to get a payment for a certain percentage of the invoice amount immediately, you will get the chance to extend the maturity date for your customers without experiencing a cash shortage arising out of maturity.
Are payments made in TL in export factoring?
No. Garanti BBVA Factoring makes payments in the currency stated on the invoice in export factoring applications.
Would commitment closing create problems in export factoring?
No, there will be no such problems.
What types of taxes are applicable to factoring transactions?
No taxes are applicable to export factoring due to the tax exemption stated in the Export Incentive Communiqué. In domestic factoring transactions, only the factoring fee and commission are subject to BSMV Banking and Insurance Transactions Tax (BITT). No taxes are applicable other than the above.
Do I have to assign to Garanti BBVA Factoring all the invoices I issue to a buyer I include in the export factoring system?
Yes. All the sales you will make to your buyers for whom you received limit approval should be assigned to Garanti BBVA Factoring during the term of the factoring agreement.
Would the presence of a factoring institution between our buyers and our company create problems?
Quite the contrary. The fact that your receivables are trakem by a financial institution would create a positive effect on the practice of payment on due date.
To what degree is the strength of a factoring company important?
It is very important. Because when your buyers are insolvent, the factoring company which has guaranteed the payment of your receivables to you can only fulfill this guarantee with its strong equity structure.
Does Garanti BBVA Factoring have connections with other factoring companies worldwide?
Garanti BBVA Factoring is a member of FCI (Factors Chain International) and IFG (International Factors Group). Both of these organizations are international unions of factoring companies which provide exchange of information among factoring companies worldwide and make regulations constituting the grounds for conditions of doing business.
How would factoring transactions affect my balance sheet?
Your liquidity rate will increase because your receivables arising out of your sales on account will be turned into cash with the factoring transaction. Contrary to bank credits, irrevocable factoring finance is not entered in the liabilities side of your balance sheet.
Do I have to include all the buyers to whom I make exports in the factoring system?
No. You can include in the system the buyers you determine according to your risk assessment, and leave the ones you wish out of the system.
Can I finance my imports with factoring?
Yes. You make your import connections; and instead of you, we pay the invoice amount to the exporter when the goods arrive at customs. You make a reimbursement to Garanti BBVA Factoring on the maturity date we specify for you. Thus, you both give a grace period to your company and benefit from all the advantages of forward import.
In import factoring, is it the factoring company which performs customs transactions for the goods?
No. All documents are drawn out in your name and you clear the goods from customs
What kind of a document does the exporter sign in import factoring transactions?
The export company signs a document which contains information about payment instructions and letter of conveyance.