What is the meaning of factoring for your business?

For simply saying, it provides rapid financing whenever considered necessary and enables you to perform your financial obligations and also funds for a successful development in your business. It is very difficult to grow the business if there is cash difficulty because of the factors such as the personnel salary payments, covering the high stock costs and the sales credit limits exceeded. Factoring converts your sales into cash and provides you an opportunity of healthy growth.

Is it difficult to establish the system?

No. We simplified this process, consequently the decisions are taken in a shorter period of time. We describe the operation of the system as follows.

• First of all, the agreement is reached on the conditions and the customers for working with your sales.

• A factoring contract is signed between Pamuk Faktoring and your company confirming the conditions agreed.

• You make the shipment as always and send the invoice to your customer. If your customer makes the payment by wire transfer, then the invoice includes a label concerning that the receivable is conveyed to Pamuk Faktoring and the payment will be made to us.

• A copy of the invoice is sent to us by you. If the payment will be made via check but not through wire transfer, then the checks are also sent to us together with the invoice.

• Then we make the prepayment up to 80% of the invoice amount on the rate agreed with you.

• We contact your buyer in order to make sure that the payment is made when the invoice term becomes due.

• The buyer makes the payment to us. We make the payment to you after deducting the expenses from 20% remainder.

• This process continues to process as explained above when the new invoices are formed and sent to us.

Can the banks present the same service?

No. The exportation factoring service is a branch of specialization which requires special services and trained personnel. In addition to this, it requires the support of the other FCI members all over the world. The banks understood that this financial resource is not available in their branches and then some of them established the factoring companies which are specialized on this subject for the purpose of ensuring their customers to obtain the maximum benefit from the factoring service.

The financing which is provided by factoring is based on your daily sales performance but not on the balance sheet values of the previous year. That is to say, factoring is rather appropriate for covering your daily cash needs. Our factoring service increases in line with your sales and provides you with more financing in comparison with the banks.

Costs

The pricing based on transaction is in question because each transaction is different than the other one. The expenses are composed of the service commission and the factoring fee. The service commission is determined in a certain percentage on the invoice value and it varies between 0.5% to 1% according to the dimension and characteristics of the business and the credit conditions. The interest rates are determined at the daily basis according to the competitive market conditions.