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What is the difference between Recourse and Non Recourse Factoring?

April 26, 2017difference factoring recourse

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What is the difference between Recourse and Non Recourse Factoring?

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Recourse Factoring excludes bad debt protection. The risk remains with you and if the customer fails to pay, the Factor will seek repayment of the amount financed against that debt. If bad debt protection is included, the service is called Non Recourse Factoring. This means that if a credit-approved customer fails to pay an undisputed debt, the Factor will credit you with the amount of the debt.