Financial Law Services in Türkiye: Where Do Companies Need Support?

When you signed your last loan agreement, which clauses did you read? Most companies look at the interest rate and the term. The real risks are usually in the back pages.

Acceleration clauses, collateral provisions, cross-default terms. Nobody thinks about them while business is good. When things get tight, they decide every option the company has.

Financial law is about managing the legal relationships that arise wherever money moves.

What Does Financial Law Cover?

For companies, the main areas are:

• Loan and financing agreements: bank loans, commercial credit, leasing and factoring
• Collateral: mortgages, pledges over movables, personal guarantees (kefalet) and bank guarantees
• Negotiable instruments: cheques, promissory notes and enforcement based on them
• Receivables management: collection strategy, enforcement proceedings and related lawsuits
• Debt restructuring: settlements with banks and creditors, concordat (konkordato)

What they share: the financial decision and the legal consequence are intertwined. Assessing one without the other can be expensive.

Loan Agreements: The Risk Is in the Details

The clauses a company should really focus on:

• Events of default: only late payment, or also deteriorating financial ratios?
• Acceleration: does one missed instalment make the whole debt due?
• Cross-default: does a delay at another bank affect this loan?
• Collateral top-up: can the bank demand additional security?

Answering these before signing leaves room to negotiate in a crisis.

Collateral and Personal Guarantees

Personal guarantees from shareholders or directors are very common in Turkish company lending. Their consequences are often underestimated.

Under the Turkish Code of Obligations (Türk Borçlar Kanunu), a guarantee must be in writing. The guarantor must handwrite the maximum amount, the date and, for a joint and several guarantee, that status.

For married guarantors, the spouse’s written consent is generally required. Some exceptions, such as guarantees by shareholders and directors of commercial companies for company matters, need separate review.

Failing these formal requirements can make the guarantee invalid, with significant consequences for both the creditor and the guarantor.

Cheques and Promissory Notes

Post-dated cheques and promissory notes remain the most common deferred payment tools in Turkish commerce. Enforcement based on them moves fast and the debtor’s objection periods are short.

A company issuing cheques needs to align its payment calendar with cash flow. A creditor company needs to watch formal requirements and presentment periods carefully.

We cover objection deadlines in Objection deadlines in Turkish enforcement proceedings.

Why Finance and Law Together?

Consider an example. A company short on cash delays a payment to one bank. Financially, it looks like a short deferral.

Legally, that delay can trigger cross-default clauses and accelerate loans at other banks. Within days, the company may face several enforcement proceedings.

That is why the legal consequences of financial decisions need to be seen in advance.

How Denova Helps

We provide Financial Advisory and Legal Advisory under one roof. From reviewing loan and collateral agreements to debt collection, restructuring and concordat, we assess every step for both its financial and legal effect.

If you want a second pair of eyes before signing, write to us.