International Factoring
For exporters seeking to sell with a 100% guarantee and receive payment upfront, there is a singular financial solution: export factoring...
International Factoring
Put simply, export factoring is when a factoring company provides a package of guarantee, collection, and financing services to a client who hands over the rights for an export receivable.
Under this process, the risk of the client’s receivables is undertaken by a corresponding factoring institution abroad. Should the buyer fail to pay the invoice amount, the exporter receives 100% of the invoice value in the stated foreign currency on the 90th day after the invoice is due.
Critical to note...
Turkish companies aiming to penetrate export markets often make significant concessions to facilitate these sales. In markets with multiple suppliers, importers tend to favor the purchase of goods without bank guarantees and prefer credit terms. Exporters, conversely, seek guaranteed sales with the quickest possible returns. Hence, the export factoring system emerges as a valuable tool for exporters. It not only helps them to augment sales and explore new markets but also provides a safeguard against buyer bankruptcy and insolvency. Additionally, it facilitates the use of prepayment options in response to export against goods transactions that are to be realized on credit. This feature is particularly beneficial for exporters, as it allows them to manage and maintain control over their cash flows effectively.
The system thereby enables sellers to sell in advance and buyers to purchase on credit. Exporters looking for risk-free entry into new markets without financing issues can achieve this through factoring, while importers can make purchases on credit and open account. Essentially, factoring allows exporters to enter new markets without risk, quickly convert deferred receivables into cash with high liquidity, and incur minimal costs. Moreover, the correspondent factoring company providing the guarantee continually updates intelligence on the foreign buyer.
Another vital point...
Deniz Factoring’s primary service is offering guarantee and collection services, acting akin to an insurance company. Contrary to common belief, the provision of financing is a secondary and optional service.
Critical to note...
Turkish companies aiming to penetrate export markets often make significant concessions to facilitate these sales. In markets with multiple suppliers, importers tend to favor the purchase of goods without bank guarantees and prefer credit terms. Exporters, conversely, seek guaranteed sales with the quickest possible returns. Hence, the export factoring system emerges as a valuable tool for exporters. It not only helps them to augment sales and explore new markets but also provides a safeguard against buyer bankruptcy and insolvency. Additionally, it facilitates the use of prepayment options in response to export against goods transactions that are to be realized on credit. This feature is particularly beneficial for exporters, as it allows them to manage and maintain control over their cash flows effectively.
The system thereby enables sellers to sell in advance and buyers to purchase on credit. Exporters looking for risk-free entry into new markets without financing issues can achieve this through factoring, while importers can make purchases on credit and open account. Essentially, factoring allows exporters to enter new markets without risk, quickly convert deferred receivables into cash with high liquidity, and incur minimal costs. Moreover, the correspondent factoring company providing the guarantee continually updates intelligence on the foreign buyer.
Another vital point...
Deniz Factoring’s primary service is offering guarantee and collection services, acting akin to an insurance company. Contrary to common belief, the provision of financing is a secondary and optional service.
The Factoring Process Outside of Turkey:
01
The importer places an order with the exporter, and a contract is signed.
02
The exporter submits both its and the importer’s details to Deniz Factoring.
03
Deniz Factoring requests a credit limit for the importer from the correspondent factoring company.
04
The correspondent factoring company communicates the importer’s credit limit to Deniz Factoring.
05
Deniz Factoring then shares this credit limit information with the exporter.
06
A contract is established between the exporter and Deniz Factoring.
07
Upon completion of the export, the exporter sends a copy of the invoice and shipping documents to Deniz Factoring.
08
Deniz Factoring assigns the invoice to the correspondent factoring company.
09
Deniz Factoring provides an advance payment to the exporter if prepayment conditions are met.
10
The correspondent factoring company collects the invoice amount from the importer on the agreed maturity date.
11
The collected amount is then transferred from the correspondent factoring company to Deniz Factoring.
12
Deniz Factoring pays the exporter company the remaining balance after deducting the prepayment amount, factoring fees, commission, and transfer costs.
Advantages of Overseas Factoring
For the exporting firm, the guarantee service:
Meanwhile, the collection service:
And finally, the financing service:
Advantages of Import Factoring
Documentation Required for International Factoring
Documents and Information Required for International Factoring Requests
To access the overseas warranty limit facility for your buyers, you must provide:
To access the overseas warranty limit facility for your buyers, you must provide:
Buyer Information Form
Seller Information Form
NTR
Loan request document list:
Following the establishment of a guarantee limit:
