FINANCIAL LEASING AND FACTORING CEMRE EKC BAYRAM 20123122016

FINANCIAL LEASING AND FACTORING CEMRE EKİCİ BAYRAM 20123122016 FINANCE IZMIR UNIVERSITY OF ECONOMICS 1

FINANCIAL LEASING, FACTORING AND FINANCING COMPANIES LAW • Number of the act: 6361 • Acceptance Date: 21. 11. 2012 • Published in the Official Gazette dated December 13, 2012 Nr. 28496 • Regulation on Incorporation and Activity Principles of Financial Leasing, Factoring and Financing Companies, OG 24. 04. 2013, 28627 2

FINANCIAL LEASING, FACTORING AND FINANCING COMPANIES LAW • The objective of this law is to regulate the establishment and operating principles of financial leasing, factoring and financing companies operating as financial institutions as well as the principles and procedures relating to financial leasing, factoring and financing contracts. 3

LEASING • Leasing is an effective investment method for companies, especially for those growing ones, through which they can provide medium and long term financing to fulfill their investments. • In leasing, the equipment required by a firm is purchased by the leasing company and then leased to the firm, and at the end of the lease period, the title of the equipment is transferred to the firm. Therefore, leasing provides significant advantages to businesses in equipment purchases. 4

A Financial Leasing Contract • It is an agreement where the lessor receives lease payments to cover its ownership costs. The lessee is responsible for maintenance, insurance, and taxes. It is a commercial arrangement where: • the lessee (customer or borrower) will select an asset (equipment, vehicle, software); • the lessor (finance company) will purchase that asset; • the lessee will have use of that asset during the lease; • the lessee will pay a series of rentals or installments for the use of that asset; 5

FACTORING • Factoring - also known as 'debt factoring' involves selling your invoices to a third party. • In return they will process the invoices and allow you to draw funds against the money owed to your business. • Essentially, these companies provide a finance, debt collection and ledger management service. 6

Factoring Contract • Factoring contract is a financial transaction whereby a business sells its accounts receivable (invoices) to a third party (called a «factor» ) at a discount. • The Seller The Factor • The Debtor • This Contract must be made in written form (Validity requirement) 7

Financing Contract • Financing contract is a contract which financing company gives credit by making direct payment to the seller with delivery or providing goods or services for the name or on account of a real person or legal entity who purchases goods or services. • This contract must be made in written form (Validity requirement). 8