It is a financial product in which one or some of financing, guarantee, and collecting services are provided by factoring companies via taking over the companies’ timed receivable arising from their domestic and foreign goods and services sales.

Factoring is a financing model which can be implemented in every area that trade exists. Factoring system is a finance resource for companies that guarantees the receivables and thus helps them to get rid of an important load such as collection operations. Factoring helps following.
- Provides optimum resource usage and inventory level.
- Finances growth with sales instead of external resources.
- Provides both time and human resources advantages to the companies  in the collection of receivables. Enables focusing on marketing and sales activities.
- Gives a chance of financing depending on current account level, and it provides liquidity against unbalanced cash flow.
- Helps companies to get rid of lots of detailed transactions during credit facilities of banks and provide funds fast and with relevant cost via assignment of invoice and easiness on providing fund.
-Increases competitive power compared to other establishments, since cash input is provided via prepayment

Services provided via assignment of invoice receivables may include collection - receivable management, financing services and in some cases guarantee services, the scope and extent of the agreement drawn up between factor (factoring company) and customer which applies for factoring are effective  in the forming of factoring costs.

The prices taken in return those services are as follows:
1. Factoring fee (financing cost)
It is a payment rate which is determined according to market conditions and applied on the fund that is used for the period between prepayment date and collection. Financing cost is calculated over the used amount, day, and factoring fee rate and invoiced to customer.
2. Factoring Commission
Factor collects a commission over the receivables which are assigned by seller in return of risk and collection management services it had undertaken, and credibility research it had provided.
3. Other Expenses
Factoring company takes expenses such as check collection fee, EFT, money transfer fee etc., beyond factoring fee and commission. Incomes such as commission, fee, and expenses taken in return to factoring services are subject to BSMV (Banking and Insurance Transaction Tax).

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