Recourse Factoring
Invoice factoring where the business remains responsible for repurchasing or reimbursing the factoring company if a customer ultimately doesn't pay the invoice.
Because the business retains the risk of customer non-payment, recourse factoring typically carries lower fees than non-recourse factoring, since the factoring company is taking on less risk overall.
Businesses using recourse factoring should account for the possibility of an invoice bouncing back to them unpaid, which is why understanding customer creditworthiness still matters even after invoices are factored.
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