Comparing Non-Recourse and Full Recourse Factoring Companies

We believe non-recourse factoring companies provide more benefits for their clients than companies that factor with full recourse; here’s why.

Non-Recourse Factoring Companies

DB Squared is a leader among non-recourse factoring companies. We choose to offer non-recourse factoring services because we believe it is more beneficial to our clients, since it reduces their financial risk, and minimizes the possibility that they might be required to buy back an invoice they factored with us.

Non-recourse factoring is less common in the U.S. due to the additional financial risk that non-recourse factoring companies assume. Non-recourse factors like DB Squared do not require a business to buy an invoice back if their customer is unable to pay due to insolvency.

When we factor – or purchase – an invoice, we also assume the credit risk for that invoice. If you factor an invoice with us and your customer is unable to pay due to insolvency we absorb the loss – not your business!

Full Recourse Factoring Companies

Recourse factoring (or factoring with full recourse) is more common but unlike non-recourse financing, recourse factors do not assume the credit risk for factored invoices. Invoice factoring with full recourse is the most common form of receivables financing.

Invoices factored with full recourse leave a business responsible for the credit worthiness of its customers, not the factoring company. If their customer is unable to pay an invoice for any reason, the business is responsible for buying back the invoice from the factor. When factoring with full recourse, the business still bears the ultimate responsibility for collecting on each invoice and may also be required to pay any legal or collection fees incurred.

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Benefits of Non-Recourse Factoring at DB Squared

Reduced financial risk for your company is just the beginning when you choose non-recourse factoring services from DB Squared.

Non-recourse factoring also trims your administrative overhead by reducing the time and resources you need to spend on accounts receivable activities. Many invoice factoring companies require their clients to turn over invoicing to them, at DB Squared, we leave the choice up to you! You can retain complete control of customer invoicing or turn over the process to us, and further reduce the time and cost of related accounting activities.

 

Clients appreciate our honesty and transparency; in fact, our customer service is one of our selling points. We don’t require clients to sign long term factoring contracts because we believe in earning your continued business and referrals, day in and day out. Here are some of the other reasons people choose DB Squared for non-recourse factoring services:

  • High advances up to 98% (or more) on invoices factored with us
  • Factoring fees as low as 1%
  • No monthly minimums – factor only when you choose to
  • No long term contracts
  • No application fees
  • No due diligence, credit check or any other hidden fees

Apply for a no obligation, no cost non-recourse factoring quote and get answers in 24-48 hours or even less; or contact us online or by calling 866-855-3640 to find out how factoring with DB Squared expedites cash flow in your organization while, at the same time, reduces your company’s financial risks by eliminating bad debt.