Domestic Factoring

Domestic factoring is a factoring service that converts deferred receivables arising from commercial transactions — where both buyer and seller operate within the same country — into financing. The seller company can strengthen its cash flow and place its commercial process on a more secure footing by transferring its invoiced receivables from goods or service sales to a factoring company.

How Does Domestic Factoring Work?

1. The seller company applies to a factoring company to convert its existing or future invoiced deferred receivables from goods or service sales into cash before their maturity.
2. After completing the necessary evaluation and review processes, the factoring company presents the seller company with a suitable financing offer, detailing the scope of services to be provided, the commission rates to be applied and related fees.
3. Once the offer is accepted, a factoring agreement is signed between the factoring company and the seller company. The seller company shares the documents required for the transfer of receivables with the factoring company.
4. After the contract and documentation processes are completed, the factoring company makes an advance payment of the determined amount to the seller company.
5. When the receivable matures, the invoice amount is collected from the buyer company and the process is completed.