What Is Barter Factoring

1. For the initiation of the Barter Factoring transactions, the creditor company, that the Factoring agreement will be made with, should become a member of the Barter System with the General Membership Contract. However an additional contract can also be composed together with the provisions and principles of this contract. This contract will be based on the principle that the receivables will be collected in two different ways. 
a. With the debtors giving security to the system with the amount of the receivable, the Creditor company can instantly be given Purchase Credit from the system. 
b. The creditor company will be given credit after becoming a member. However if the payment distress of the Debtor also reflects on its ability to give security, the Creditor will be given sales authority code only after the debtor company sells goods and services to the system in the amount of the receivables. 
2. The creditor company prepares a list with the amount of the receivables and the detailed explanations of the companies. After the necessary investigations have been done on the debtor companies over this list, the debtors are made members of the Barter system. It is evident that the reason of this membership is to provide the means for the debtor company to pay the debts to the creditor company with the debtor's own goods and services. 
3. After the creditor company and the debtor company are made members of the Barter system and after the necessary securities and/or product supply and demand comparisons are ensured, Factoring transaction will be realized. 
4. Sample Transaction: Outside the Barter system
Company B owes 100 Billions to the Company B,
a. Company A becomes a member of the Barter System by signing the General Membership Contract and by providing the other provisions.
b. Company B becomes a member to the Barter System with the same conditions. However this company should also supply security to the system with the amount of the debt. With this security a Credit Limit is consigned to Company A.
c. If the Company B does not give security, the sales of the goods and services with the amount of the debt should be made to the barter pool. Meanwhile the creditor company cannot use credit. 
d. When the Company B pays the complete amount of the debt with goods and services, the credit of the creditor company will start. 
5. A preliminary investigation about the creditor and the debtor companies and about the goods and services that they can purchase or sell in the Barter Pool and the determination of their appropriateness will increase the speed of the Factoring transactions. 

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