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hello Sir,
Can you please clear the difference between factor finanace and non recourse service
I have gone through the relevant lecture and notes but I am bit confused
Kind regardsIt is not that there is a difference – non-recourse is an extra service that factors offer.
Factoring is basically paying someone else to collect our debts. Usually they will also be prepared to give us some of the money in advance (and charge us interest).
However, the may also offer an extra service as well which is that they will guarantee that we will receive payment for our debts in full (so no irrecoverable debts). They will obviously charge extra for this service if we want it.
The factoring is then known as non-recourse factoring.
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