International Conference on Eurasian Economies
18-20 June 2018 – Tashkent, UZBEKISTAN
Paper detail
Paper ID : 2203
Status : Paper published
Language : Turkish
Topic : Finance and Financial Crises
Presenter: Prof. Dr. Mustafa Ay
Session : 4B Dış ticaret
Factoring and Stock Financing in Trade Finance
Ticaretin Finansmanında Factoring ve Stok Finansmanı
- Prof. Dr. Yunus Ceran (Selçuk University, Türkiye)
- Prof. Dr. Muhammet Bezirci (Selçuk University, Türkiye)
- Prof. Dr. Mustafa Ay (Selçuk University, Türkiye)
- Ph.D. candidate Merve Öztürk (Istanbul Bilgi University, Türkiye)
Abstract
Factoring is a nonbank financial institution which meets the financing needs of the enterprises and minimizes the non-payment risk and stock financing which is based on the bank loans are two alternative financing techniques that enables collateral and collection and financing to SME’s, suppliers and commercial enterprises. These two methods are important in terms of the advantages they provide to vendors and suppliers. Reducing the non-payment risk, securing liquidity to business, minimizing the risk level of sales by making them safer and increasing competition power on the market are among the advantages. Stock financing is another method which is much more recent than factoring became a current issue in 2000’s and developed to minimize non-payment risk and provide cash flow on the basis of bank loan. In Turkey, this method is only applicable to automotive industry for now. This method emerges as an advantageous method for businesses experiencing difficulties in financing, inability to collect their receivables, and the inability to deplete their inventories. With the stock financing method, car dealers have affordable and easy credit facilities in order to make payments to the main supplier in exchange for their existing inventories. The aim of this study is to compare factoring and stock financing method and revealing the advantageous and disadvantageous points of two alternative methods.
JEL codes:
Ceran, Yunus, Bezirci, Muhammet, Ay, Mustafa , Öztürk, Merve (2018). "Factoring and Stock Financing in Trade Finance" in Proceedings of International Conference of Eurasian Economies 2018, pp.218-223, Tashkent, UZBEKISTAN.
DOI: https://doi.org/10.36880/C10.02203
