Factoring Companies determine type and conditions of Factoring, for which they want to make transaction in compliance with demands and requirements of the customer. Main types of Factoring may be listed as follows :
- Prepayment - non prepayment
- Revocable
- Irrevocable
- Open or closed Factoring.
However, Factoring transactions are applied as Domestic Factoring and Foreign Factoring generally.
DOMESTIC FACTORING
It is the factoring transaction, performed between buyer, seller and Factoring company, resided in the same country. Customer may benefit from 3 main services such as Guaranty, Financing and Collection by transferring its term receivables, arising from sales of goods or service, to the factoring company.
FOREIGN FACTORING
Exportation Factoring: It is the factoring transaction, performed in case buyer is in another country. Buyer is in the position of importer and seller is in the position of exporter. Exportation factor in the country of exporter informs about buyer from importation factor in the country of importer and requests to assign guaranty limit. Thus, exportation factoring has also provided guaranty service for the seller through importer factor except investigation and financing of receivables.
Importation Factoring: It is the factoring transaction, performed in case seller is in the abroad and buyer is in the domestic. Importation factoring may be considered as the reverse of exportation factoring. In this factoring transaction, importer factor gives the guaranty of payment to the seller firm in the abroad through reporter in case importer is in insolvency.
