Discusses the most common methods of payment, such as open account, letter of credit, cash in advance, documentary collections, factoring, etc. Includes credit-rating and collection agencies in this country. Includes primary credit or charge cards used in this country.
Last Published: 6/20/2019

Traditionally, Turkish corporations have satisfied most of their financing requirements through the banking industry.  Corporate/banking relationships are easy to establish.  However, given the continuing gap between Turkey's extensive needs and its limited internal resources, external financing for public and private projects investment will likely remain necessary in the coming years.  Exporters are advised to provide financing for their exports.  In addition to short and medium-term credits available from commercial banks in local and foreign currencies, lower-cost Turkish Lira (TL) credits are also available from the Export Credit Bank of Turkey.

Letters of Credit (LCs) are traditional import instruments for private-sector transactions.  LCs should be irrevocable and confirmed by a prime U.S. bank.  As Turkish importers develop long-term contacts and prove their creditworthiness, suppliers may be willing to accept documents against payment (d/p) or documents against acceptance (d/a).  Deferred payment schedules are not common, except in cases of large transactions where supplier financing plays a role.

Turkish banks continue to see some tightening in their access to international credit, though the major banks borrow internationally.  Suppliers should consider unconventional project financing packages (e.g., forfeiting, factoring and utilization of third-country export credits) when bidding on major government infrastructure projects.  Exporters should be flexible and try to accommodate the needs of their customers by building any additional associated costs into the offer price.

Firms bidding on Government of Turkey contracts should pay careful attention to the way proposals are prepared and should follow closely the administrative specifications.  Financing costs and foreign exchange rate risks, where applicable, should be factored into the bid price.  Bids that do not comply with administrative specifications, which include financial criteria, are generally rejected.  The validity of a proposal is required to be written in the tender notice.  Government tenders often involve bid and performance bonds.  Bid bonds cannot be lower than 3% of the value of the tender, while performance bonds are usually equivalent to 6% of the contract value.  Bid bonds are not mandatory for consultation services, if it is mentioned in the tender document. Bid bonds are not mandatory for direct supplies. The government only calls these bonds in cases of substantial non-performance.  All bonds must be counter-guaranteed by a Turkish national bank.

The contracting authorities may insert some provisions to the tender documents; regarding procurement of services and works, a price advantage would apply to domestic tenderers up to 15%, and in procurement of goods, a price advantage up to 15%, would apply to domestic tenderers who offer products which are accepted as domestic products by the authority.

Several leasing companies operate in Turkey, most of them owned by Turkish banks.  They finance purchases of expensive capital goods such as aircraft, auto fleets, construction equipment and other special equipment.  Turkish financial leasing in capital expenditures still only accounts for a fraction of capital expenditures in developed countries.  The terms of leasing are usually four years, with a balloon payment at the end.  Turkish leasing companies are eager to work with U.S. counterparts.

18 Turkish factoring companies (usually spin-offs of banks) are members of the Factors Chain International (FCI) in Netherlands.  Like leasing companies, factoring and forfeiting companies generally suffer from funding difficulties.  All U.S. banks active in Turkey deal with at least one of the major leasing and factoring companies.

For more information about the methods of payment and other trade finance options, see the Trade Finance Guide.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.