DOMESTIC FACTORING:


The seller furnishes the Factor with the information regarding the buyer. The factor determines a limit for the buyer upon investigation and intelligence activities made by the Factor for the buyer. The Seller assigns its receivables to the Factor and upon its request the seller uses a certain proportion of such receivable as cash. The Seller sends a notice to its buyers to pay their debts to the relevant Factor on the due payment date. Whether the Factor assumes the risk of receivable or not is dependent on the request of the user and the credibility of the buyer. The Factor may offer recourse factoring method to the seller if the Factor does not assume any risk in domestic factoring. In this form of factoring, the Factor does not assume any risk of receivable but financing or collection services are provided to companies upon their requests.

• FULL SERVICE FACTORING

In this form of factoring, companies may benefit three main services of factoring. In this model in which the risk of receivable is assumed by the Factor, the Factor performs a preliminary work upon the application of the seller and determines individual limits for each buyer depending on their credibility. While the seller that assigns the risk of non-payment by the buyers to the Factor decreases its trade risk to a minimum level, the
seller may also receive a certain proportion of its receivables in cash as soon as the seller requests such payment. In this form of factoring in which the Factor is liable for collections of receivable, all receivables are collected by the Factor on the due date of payments.


• RECOURSE FACTORING

In this form of factoring in which only financing and collection needs of companies are met, the seller assigns its receivables arising from credited sales with due date to the Factor in a recourse way and receives a certain proportion of such receivables as cash. Collection activities are performed by the Factor but the Factor is reserved its right to recourse the seller for any receivable that is not collected.

• UNDISLOSED FACTORING

In this form of factoring the seller makes its sales on credit as cash and assigns the risk of the buyer to the Factor but the collections on due date are made by the seller.


• MATURITY FACTORING

Maturity factoring which is based on only supplying services of collection and assuming risk does not provide any financing services to sellers.

• BULK DISCOUNTING

This form of factoring in which the Factor buys the seller’s current receivable with short term due date is simply providing financing. Although notices are sent to the debtors to make payments to the Factor, the Factor is not liable for any collection of debts and the risk of buyer as this form of factoring is applied on the principle of recourse factoring.

• INVOICE DISCOUNTING

It is a form of factoring in which buyers that do not need any collection service and protection of risk are simply provided financing services. Different from bulk discounting factoring, no notice is sent to debtors in this form of factoring.

• MEDIATORY FACTORING

This form of factoring in which services of protection against risk of non-payment by the debtor and financing the seller acts as an agent of the Factor and collects receivable on the behalf of the factor.