Factoring in international trade finance and factoring application in Turkey

Since the beginning of civilization, countries have established mutual commercial, cultural, military and economic relations with each other. The fact that the products and services they produce depend on the expertise of the countries, or that they are more than the needs of the goods they produce, have led to trade with each other. Certain rules and financial techniques have been developed to ensure that international trade is performed healthily. Historical method and literature review technique was used in the study. Factoring, which has been developed as an alternative finance technique and operates by taking over the transaction, creates financing for both national and international trade and also removes the risk of collection at the same time. Factoring, especially for businesses aiming to open up to new markets in international trade, is being used as a financial instrument facilitating its financing, collection and guarantee services. Commercial businesses were looking for financing to increase their sales beyond the border, and at the same time they expected to collect the costs of their products without any problems. The fact that international trade takes place between different countries and exporters are very limited in their search for buyers in different countries, poses a great risk to collections. Key Words : Factoring, Financing, Foreign Trade