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What does a factoring company do in the case of nonpayment?


If a customer refuses to pay the debt to a factoring company it is termed as a dispute.Factoring companies will do all they can to resolve a dispute within a reasonable timeframe, using a range of debt collection practices. However, if a debt cannot be recovered or the debtor has become insolvent there are two ways that the factor can proceed. With a non-recourse factoring agreement, the factor offers bad debt protection and will take on the debt themselves and credit the invoice. With a recourse factoring agreement, the business issuing the invoice is liable to pay the factor for any outstanding debts and the invoice will be reassigned back to them.

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  • Why turn to a factor rather than seek a bank loan?
  • How does a factoring finance arrangement work?
  • Who collects the debt due, the factor or my business?
  • What's the difference between factoring with recourse and factoring without recourse?
  • Does factoring require a minimum number of invoices?
  • Do my customers know of the factor’s involvement?
  • What are the requirements for invoice discounting?
  • Is there any collateral requirement for factoring?
  • How quickly can I access cash for the invoices I sell to a factor?
  • Who do I turn to if I have a dispute with my factoring company?
  • I have overseas clients; can I factor international invoices?
  • Is it easy to terminate a factoring arrangement?
  • What regulations apply to factoring companies?
  • What does working capital mean to your business?
  • What is the difference between factoring and bill discounting?
  • What is credit insurance?
  • What is export factoring?
  • What is the difference between invoice factoring and merchant cash advance?
  • What is the difference between factoring and securitisation?