The non-recourse factor typically holds a credit insurance policy that protects against bankruptcy of the company paying the purchased invoices. The cost of the insurance is passed on to the invoice seller, so on an apples-to-apples basis, the non-recourse seller pays a bit more on each factored invoice than he would in a recourse deal. The non-recourse factor has based his fixed rate on the assumption that each invoice will be paid in say 45 days on average...if a payer pays in 55 days, the non-recourse factor will refuse to buy those invoices, but the recourse guy can still do it. So the recourse guy will factor a higher percentage of invoices, but probably at a lower advance on each one. Total amount of funding and cost depends of each situation.
Factoring companies: which are good? What to look out for?
Discussion in 'Ask An Owner Operator' started by last load, Apr 10, 2013.
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I don't think so... I just think they all do it to reduce the consequences of bankruptcy. -
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Last edited by a moderator: Dec 18, 2013
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ironpony Thanks this.
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Don't use em. Pay somebody to give me money that's owed to me? no thanks.
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