Recourse Factoring: A Cost-Effective Cash Flow Solution
Recourse factoring is a type of financing where businesses sell their invoices to a factoring company, but retain responsibility if customers fail to pay. This option typically comes with lower fees, making it a cost-effective choice for companies confident in their clients' payment reliability. Recourse factoring provides immediate access to working capital, helping businesses meet their financial needs while reducing the risk of cash flow disruptions. It’s a practical solution for businesses seeking to maintain control and minimize costs.
Recourse factoring allows businesses to sell invoices for immediate cash, but they remain liable if customers default on payment.
In non-recourse factoring, the factoring company assumes the risk of non-payment, while in recourse factoring, the seller retains that responsibility.
It offers lower fees, quick access to cash, and flexibility for businesses with reliable customers.
If your customers have a strong payment history, recourse factoring can be a cost-effective way to improve cash flow.
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