How Recourse Factoring Works

Recourse factoring enables a business to unlock the working capital tied up in receivable invoices. Businesses that factor with recourse sometimes enjoy lower rates than non-recourse factoring fees since the factoring company does not take on the additional risk from bad debt. Take a closer look at the process by comparing these two scenarios:

Typical Receivables Timeline
Day 1: Create a customer invoice for services rendered (or goods sold) in the amount of $7,500

Day 30, 45, or even 90+: Receive customer payment

Recourse Factoring Receivables Timeline
Day 1: Create a customer invoice for services rendered (or goods sold) in the amount of $7,500

Day 1: Factors the invoice through one of Corsa Finance’s specialty partners

Day 2 or 3: Receive $7,125 ($7,500 less $375 factoring fee)

Organizations that factor with full recourse are generally required to buy back an invoice that goes unpaid for any reason or within a designated period of time (such as 90 days). Using recourse factoring to speed up cash flow could provide your company with many benefits; including freeing up working capital in order to:

  • onboard new accounts or larger customers
  • take advantage of early-pay vendor discounts
  • avoid late-payment penalties (when slow-paying customers  affect your ability to make payments on time)
  • extend generous payment terms to your customers as a competitive client acquisition or retention advantage

Instead of spending time trying to collect customer invoices, recourse factoring generates cash flow from your receivables so you can stay focused on growing your business.

Fast, Secure and Easy

Complete the application process today and get approved to factor invoices within 2-3 days or faster.

invoice factoring application

1. Submit an inquiry for more information – it’s fast, easy, and free.

submit invoices for factoring receivables financing

2. Submit only those customer invoices you wish to factor.

get working capital to grow your business by factoring invoices

3. Receive funds the same or next business day via wire transfer on factored invoices.

speed up cash flow using non-recourse factoring, factoring with recourse or non-notification factoring

4. Speed up cash flow to avoid opportunity costs and stay focused on building your business.

What is Recourse Factoring?

Recourse factoring — or factoring with full recourse — has been utilized for hundreds of years for cash flow financing (or receivables financing). There are three parties involved in the process:

  • A business that produces goods or provides services and then 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”)

Organizations that factor with full recourse in order to speed up cash flow essentially obtain a recourse loan for up to 95 percent of the amount of the invoice factored. If the factoring company is unable to collect payment on the invoice from the customer for any reason or within a specified time period (such as 90 days, 180 days, etc.), then the client is responsible for “buying back” the invoice from the factoring company.

The financial risk carried by the factoring company is less than in some other types of invoice factoring (such as non-recourse receivables financing), which could mean lower factoring fees for the client or higher approval rates on debtor invoices (debtors that might not be a good fit for non-recourse factoring).

Why Choose Corsa Finance for Recourse Receivables Financing?

We look for reasons to say “yes!” to clients at every step of the process. We make it easy and free to apply, and offer several types of invoice factoring products so that you can choose the most appropriate option for your organization.

Our rates are competitive, with low reserves and fast funding. There are no hidden fees or application or due diligence fees, and as our factoring client, you are free to factor only when you choose, so you can stay in control of the process and do what’s best for your business.

Get answers in 1-2 business days, or even faster, when you apply today.