Factoring agreement is the agreement which includes any or all of the following functions: The collection, the keeping of the borrower and customer records by the factoring company for the customer by means of taking over the receivables arising from the sale of products or services which could be documented within the framework of the procedures and principles to be determined by the Board, and the receivables which could be documented by the invoice arising from the sale of products or services; or the factoring guarantee function. (art.38)

The factoring agreement must be prepared in writing.

Faktoring sözleşmesi; mal veya hizmet satışından doğmuş fatura ile tevsik edilen alacaklar ile Kurulca belirlenen usul ve esaslar çerçevesinde tevsik edilebilen mal veya hizmet satışına bağlı doğacak alacakları devir almak suretiyle, faktoring şirketinin müşterisine sağladığı tahsilat, borçlu ve müşteri hesaplarının tutulmasının yanı sıra finansman veya faktoring garantisi fonksiyonlarından herhangi birini ya da tümünü içeren sözleşmedir.

The factoring is used to mean “the provision of financing by acquiring and then collecting the assets which are already appeared or are expected to be appeared on behalf of the assignor”, deriving from the latin word factor as including “ an action on behalf of another person or activity”.

In Turkey, the concept of factoring has been entered to the banking terminology with the "Decree Law pertaining to Businesses of Lending Money" in However, with the development of finance sector in Turkey more detailed provisions were enacted with the "Regulation pertaining to Establishment and Activities of Leasing, Factoring and Financing Companies". Finally the limits of sector is drawn by : FINANCIAL LEASING, FACTORING AND FINANCING COMPANIES CODE

Provisions related to loan lenders (ikrazatçı) The persons who carry out loan lending activities based on the power granted by the Decree No. 90 may apply to the Agency for the purpose of executing one of the activities stipulated in this Law within six months of the enactment of this Law. Within this period, they cannot carry on any loan lending activities other than the transactions intended at the collection of their receivables arising from their current agreements. The loan lenders who apply to the Agency may continue their activities as factoring, financial lease or finance companies upon obtaining the required permits from the Board.

The companies to be established are obliged to fulfill the capital requirements found in the sub paragraph (f) of the first paragraph of Article 5 of this Law within three years. The loan lending permits of the persons who do not make an application to the Agency or who could not obtain the necessary permits from the Board despite the making of the application, automatically ceases without the need for the carrying out of an additional procedures.

Financing Agreement A financing agreement is the agreement which prescribes the provision of a loan for any kind of procurement of product or service, by the making of a payment directly to the seller upon the supply or delivery of the product or the service to the name and account of the real or legal person who has purchased the product or the service. The loan repayments are made to the finance companies by the persons to whom the loan is provided. Finance companies are obliged to make a written general agreement with the sellers who supply the product or service for which the loan will be provided. The financing agreement must be prepared in writing. (art.39)

Finansman sözleşmesi MADDE 39- (1) Finansman sözleşmesi, her türlü mal veya hizmet alımının, malı veya hizmeti satın alan gerçek veya tüzel kişinin nam ve hesabına mal veya hizmetin teslim veya temini ile birlikte doğrudan satıcıya ödeme yapılması suretiyle kredilendirilmesini öngören sözleşmedir. Kredi geri ödemeleri, adına kredi açılanlar tarafından finansman şirketlerine yapılır. (2) Finansman şirketlerinin, kredilendirecekleri mal veya hizmetleri temin eden satıcılarla önceden yazılı şekilde genel bir sözleşme yapmaları zorunludur. (3) Finansman sözleşmesinin yazılı şekilde düzenlenmesi zorunludur.

Financial Leasing, Factoring and Financing Union of Companies Financial Leasing, Factoring and Financing Companies Union is established as a public law legal person. The companies are obliged to become a member of the Union within one month of the date of the obtaining of the operating permit.

Central invoice registry The information in relation to the receivables that the factoring companies and banks have taken over, including the invoice information; are collected before the Risk Center or in a formation to be deemed appropriate by the Union. The principles and procedures in relation to the sharing of the information are determined by the Union.