Glossary
What is Non-Recourse Factoring?
Non-recourse factoring is an invoice factoring arrangement in which the factoring company absorbs the loss if a customer fails to pay for specified reasons, most commonly the customer's insolvency or bankruptcy. Because the factor takes on more risk, non-recourse factoring usually costs more than recourse factoring. Protection is often narrower than the name suggests and typically does not cover disputes, short payments or a customer that refuses to pay. Read the contract definitions closely.
Example
A factor absorbs the loss on an invoice when the customer files for bankruptcy, as defined in the non-recourse agreement.
Related funding
Invoice Factoring: Turn slow-paying invoices into cash now.
Related terms
Questions about an offer? Your advisor will explain every term.