Mini Case:

G$$zel Tekstil located in Turkey, a small but rapidly growing textile garments company. He wants to grow in international markets $.$ While G$$zel Tekstil is excited about the growth opportunities, the delay in payments is a concern nowadays $.$ The potential buyer is located in Polland. Buyer wants to buy goods with $90$ days $\frac{O}{A}$ basis.

G$$zel tekstil has concerns of nonpayment and wants to create a solution to finance his receivables $($ i$.$e get payment after shipment $)$ in order to pay to his own suppliers on time.

G$$zel Tekstil decided to use factoring as a solution.

Gzel Tekstil signed a factoring agreement with a factoring company called H$$zl$$ Para Ltd$.$ The factoring company agrees to advance $85\%$ of the value of the invoice G$$zel Tekstil sends to its client. $($ the discount rate is $3\%$ p$.$a $)$ The total annual sales expected is $4\mathrm{.}000\mathrm{.}000$ USD and each time the seller issues his invoice is around $1\mathrm{.}000\mathrm{.}000$ USD. $($ revolves $4$ times in a year $)$ Each time the seller takes this amount of risk $($ this is what it means $).$

H$$zl$$ Para Ltd also charges a factoring comm $($ that includes the guarantee commission of import factor $)$ of $3\%$ for each invoice they factor. This fee is deducted from the amount they advance to G$$zel Tekstil in addition to the discount to be applied.

Once g$$zel Tekstil settle the invoices, H$$zl$$ Para Ltd will remits the remaining $15\%$ of the invoice value to G$$zel Tekstil.

Pls$.$ explain what is the reason that the seller applied for factoring

Pls$.$ explain how it will work. Pls$.$ explain the role of parties in this transaction.

If you were the seller which factoring type you would want, with recourse or without recourse. Why $?$

How does factoring help to the seller. Pls$.$ explain $2-3$ main benefits Please as soon as possible