Non-Recourse Factoring
With non-recourse factoring, the invoice factoring company is mostly responsible for non-payment credit risk of the client’s customers – although the company is not always free from risk.
Essentially, with non-recourse factoring, the factoring company assumes the risk of purchased invoices going unpaid and turning into bad debt. This differs from recourse factoring, where the client assumes the risk if a customer invoice goes unpaid.
Because the factor accepts greater liability with non-recourse factoring, it tends to be more expensive than factoring with recourse.
