Non-Recourse Factoring Companies
Non-recourse factoring companies provide your business with additional benefits vs. receivables financing with full recourse factoring companies. Find out more about the difference between non-recourse vs. recourse factoring:
Invoice factoring is a process in which a business factors a customer invoice with a receivables financing company like DB Squared in order to get immediate access to the working capital that might otherwise be tied up for weeks – or even months – while they wait for the customer to pay.
There are two basic types of receivables financing companies: non-recourse factoring companies and companies that factor with full recourse. With both types of receivables financing companies, there are three parties directly involved:
- An organization that invoices its customers for payment (the “client”)
- The customer responsible for paying the invoice (the “debtor”)
- A receivables financing company that factors the invoice (the “factor”)
Recourse factoring leaves the client responsible for the credit worthiness of its debtors, with the factoring company retaining the right to sell an invoice back to their client if a debtor is unable to pay for any reason — even if the invoice simply goes unpaid for a short period of time. When working with a company that factors with full recourse, the client may even still be responsible for collecting on the invoice as well as paying any legal fees the recourse factoring company accrued while they held the customer invoices.
Non-recourse factoring companies assume the credit risk for invoices they factor. If a customer is unable to pay due to insolvency, the non-recourse factoring company absorbs the loss, not the client.
Benefits the Best Non-Recourse Factoring Companies Provide
There are many reasons that it makes sense to choose non-recourse factoring compared to factoring with full recourse. Some of the benefits of choosing non-recourse factoring companies over those that factor with full recourse include:
- expedited cash flow enabling faster growth or improved ability to meet expenses
- reduced financial risk with increased protection from bad debt
- saving time and resources related to accounts receivable activities
Clients factoring with us receive the additional benefits non-recourse factoring provides at rates comparable to those offered by companies that factor with full recourse.
Even if you are already factoring, we would be happy to provide you with a free, no-obligation quote so you can compare your current agreement against the benefits of working with a top receivables financing company like DB Squared, where you will enjoy:
- Non-recourse factoring fees as low as 1%
- Free same day funding on advances, which range from 85-98%
- No long term contracts or monthly minimums
- Completely free to apply for a proposal
- No hidden fees – low factoring fee is your all-in cost
- Free credit checks to help you reduce risk with new customers
- Professional customer service provided by an experienced, dedicated account manager
- Reduced financial risk from bad debt for your organization with non-recourse factoring