Non-recourse factoring

A non-recourse arrangement may protect the business against agreed default events for approved receivables. It commonly costs more than an otherwise comparable arrangement without that protection. The business must still examine credit limits, eligible customers, dispute provisions, fraud exclusions and documentation requirements. Non-recourse does not mean that every unpaid amount is guaranteed or that no contractual claim can ever return to the seller. When appraising the service, include the expected reduction in covered losses alongside fees, financing costs and operational effects.