|
Recourse Factoring:
Recourse factoring means any invoice
your lender purchases from you is
going to be paid either by your
customer - or you if the customer
doesn't pay. Because you are taking
the risk as to whether or not the
receivable will be paid - recourse
factoring is much cheaper - and far
more common in the trucking
industry.
What's the difference between
recourse and non-recourse factoring?
Two things- first is the cost
for a non recourse factoring
arrangement is much higher. Non
recourse factoring lenders are
taking the entire risk that if one
of your customers doesn't pay - they
eat the invoice - you don't. Yes it
provides some comfort for customers
selling invoices - but the costs
will be much higher in fees, per
invoice, and discount rate.
Several years ago there was a run on
non recourse factoring as carriers
worried about big customers -
especially in the automotive space -
going under. The rates for those non
factoring agreements reflected that
risk and many carriers ended up
getting crushed because of those
rate discounts.
Recourse factoring is the most
common and least expensive. We
provide contacts and knowledge in
the factoring industry that few
other CPA firms can match. We will
get you the best factoring discount
rates available.
Brad Hoffman has been dealing with
factoring lenders for over twenty
years and has the knowledge and
connections to match your company to
the right lender. Give Brad a call
to discuss your non recourse
factoring needs at 614-203-8021 |
|
|