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WHAT IS THE DIFFERENCE BETWEEN FACTORING INVOICES ON “NON-RECOURSE” AND FACTORING INVOICES “WITH RECOURSE”?

April 26, 2017factoring invoices non-recourse with recourse

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WHAT IS THE DIFFERENCE BETWEEN FACTORING INVOICES ON “NON-RECOURSE” AND FACTORING INVOICES “WITH RECOURSE”?

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When an invoice is factored on a “non-recourse” basis the Factor takes the credit risk of the account debtor, thereby protecting the client from credit loss. When an invoice is factored “with recourse” it means that the client is ultimately responsible for payment, regardless of whether the account debtor pays or not.