Factoring Agreement Sample With Recourse In Cuyahoga
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The agreement with non-recourse factoring is that, within certain conditions, if the payments are late or unpaid then the factor absorbs the costs, the company does not have to worry about debt created by unpaid invoices.
There are two types of debts: recourse and nonrecourse. A recourse debt holds the borrower personally liable. All other debt is considered nonrecourse. In general, recourse debt (loans) allows lenders to collect what is owed for the debt even after they've taken collateral (home, credit cards).
With recourse factoring, the business is responsible. But with non-recourse factoring, the factoring company is responsible, although there may be some stipulations based on the terms of the agreement. Higher advance rates (i.e. amount of funding you receive upfront). Lower advance rates.
