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Non-Recourse Factoring
With non-recourse
factoring, the risk of non-payment by your customers lies with
the factor. If the client’s customer doesn't pay, the factor
generally does not have recourse against the client for payment
of the invoice.
Because of the bad
debt protection it offers, non-recourse factoring tends to be
more costly than recourse factoring, but the value is determined
by your opinion on carrying that risk.
With non-recourse factoring you do not have to refund the
advance to the factor, but you are typically required to pay
interest to the factor for a specified time frame. Lastly,
with non-recourse factoring, the factor takes over all of your
rights to pursue payment by that client.
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