Tag: Factoring Options

Get To Know Recourse And Non Recourse Factoring Options

Posted on November 25, 2016  in Blog

Non-Recourse Factoring is one of the best invoice financial solutions, as it enhances cash flow by providing cash against your customer’s invoices within a day of approval.

You must try to choose professional factoring companies that have good experience in freight and transportation factoring. You can consider Easy Freight Factoring Company for your factoring requirement that provides competitive solutions for freight factoring so that you can assure working capital that supports your business growth. You can type as EZ Freight in the search box to visit their official website.

The growth of transportation industry impacts greenhouse gas level in the atmosphere. The trucking industry must follow right technology to enhance fuel efficiency that facilitates to reduce greenhouse gas emissions from the freight and transportation industry. You can check the site http://files.dep.state.pa.us/air/AirQuality/AQPortalFiles/Advisory%20Committees/CCAC/2015/4-21-15/Freight_3-31-15_(+RG+mb_edit).pdf to know about the technology to be used, important benefits, implementation steps, etc.

You can find the advantages and disadvantages of non-recourse factoring explained below.

In addition to offering funding and credit management, non-recourse factoring type also includes protection from bad debt, protects your cash flow against bad debt and late payment, whether because of protracted default or debtor insolvency. Based on the cash flow requirements for your business, non-recourse factoring option supports to increase funding level and services provided.

Non-recourse factoring enhances cash flow by releasing maximum 90% of your invoice value. It prevents you from the risk of non-payment of your customers through insolvency, and also extended default. Non-Recourse Factoring decreases possibilities of late payment since the factoring firm will credit check your new, as well as existing customers, and thus will allow you to decide the suitable the customers to trade with. You can discuss with credit control expertise support you to decrease in-house costs, providing you resource and time to focus on your core business.

You will get huge benefits in non-recourse type, and it is essential to pick the factoring company that gives the right service as per your business requirement at the right cost. You have plenty of factoring companies to choose, and choosing a factoring company is a complex job. Sometimes, your customers couldn’t make invoice payment for several reasons including invoice disputes, rather than invoice sent by your factor you may send the invoices, etc. Factor assumes more risk in non-recourse factoring type, and it is not much flexible when compared to the recourse type.

You can even determine whether recourse option is suitable for your business. In this type, there will be recourse period, before which your customers must settle invoice payments. In recourse type, you have the responsibility if your customer fails to pay the invoices within the recourse time. Since you bear the additional risk, the cost of recourse option is lesser than non-recourse factoring.

The trucking companies prefer non-recourse factoring option in recent years since it offers financial security when the customers are not paying the invoices. You are not eligible to pick non-recourse option when the load amount is not paid due to any dispute or claim.