Technology/Functionality

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What's the difference between factoring with recourse and factoring without recourse?

There are two  types of invoice factoring to choose from; recourse factoring and factoring without recourse. With a recourse contract, any unpaid invoices (where the debt cannot be recovered) must be paid back to the factor. However, in a non-recourse agreement, the factoring company takes on any unpaid debts (and claims any losses back through their own insurance). Because your business carries the risk of unpaid invoices in a recourse contract, you will take a higher percentage of each invoice sold. With a non-recourse contract you can expect a smaller return on each invoice, but you will benefit from the security it offers.

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