Non recourse factoring seems to cause some confusion and I must admit it has caused me to raise my eyebrow on occasion.
A true non recourse facility means that once a debt is notified and you are within the credit limit set by the lender you have nothing to worry about. If it goes past the agreed ‘recourse period’ the debt is settled by the lender.
However, some lenders offer credit protection/bad debt protection/ credit insurance alongside their finance products but this is not true non recourse. Any bad debts rely on you as the client making a claim. During the settlement period the debt in effect could be recoursed back to as far as funding is concerned. Alternatively the lender may continue to finance that particular debt at the clients expense.
If non recourse factoring is what you are looking for it is important to ensure you understand how any bad debt must be claimed for but also how it will effect your funding.
If you want to know more please contact Smart Factoring Quotes.
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