What is Non-Recourse Factoring?
There are two basic types of receivables financing: non-recourse factoring and full recourse invoice factoring. With both types of receivables financing, there are three parties directly involved:
- An organization that invoices its customers for payment (the “client”)
- The customer responsible for paying the invoice (the “debtor”)
- A receivables financing company that factors the invoice (the “factor”)
With non-recourse factoring, a factoring company assumes the credit risk for invoices they factor, or purchase, from the factoring client. If a customer (or debtor) is unable to pay due to insolvency, the non-recourse factoring company absorbs the loss, not the client. With non-recourse factoring, clients rarely have to buy back an invoice. Generally this would only occur in the case of customer dispute; such as, the customer did not receive the shipment, refused delivery or returned it.
Full recourse factoring (or factoring with recourse) leaves the client responsible for the credit worthiness of its debtors. The factoring client may be required to buy the invoice back if their customer (the debtor) is unable to pay for any reason or fails to remit payment within a specified time period.
Why Choose Corsa Finance for Non-Recourse Invoice Factoring?
Our clients can receive the additional benefits non-recourse factoring provides at rates comparable to companies that factor with full recourse.
- Competitive rates and high advances
- No contract, short term and long term contracts
- Outstanding customer service
- No minimums – factor only when you choose
- Small ticket factoring available
- Free funding on factored invoices within 1-2 business days
- Flexible, tailored programs
- No application, due diligence or administrative fees
Plus, we look for reasons to say “yes!” and operate transparently with no hidden fees that can drive up the cost of receivables financing.