Choosing the benefits of non-recourse factoring enables you to reduce your company’s financial risk from bad debt and reduce overhead by minimizing the resources consumed by accounts receivable-related activities.
Business Bankruptcy Filings Up 28% in 2016 Through May
Last year nearly 25,000 businesses filed for bankruptcy protection in the U.S. According to the American Bankruptcy Institute, more than 16,000 businesses have filed this year – 28 percent more than the number of businesses that filed during the same time period last year. 155 businesses are filing for bankruptcy each day in the U.S. this year compared to just 119 per day in 2015.
This trend continues an uptick in filings; 2015 filings were up 46 percent compared to the year before, a fact attributed primarily to challenges facing companies in the energy sector. When companies receive bankruptcy protection, they are said to be insolvent. As a result, some or even all of their financial obligations might be left unpaid. One of the key benefits of non-recourse factoring is financial protection from bad debt in cases where customers are unable to pay due to credit (insolvency) reasons.
Reducing Bad Debt Tops List of Benefits of Non-Recourse Factoring
One of the benefits of non-recourse factoring is added financial protection for your business. If your customer is unable to remit payment on a factored invoice due to credit reasons, the non-recourse factoring company absorbs the loss (not your business). This is the primary reason to choose non-recourse factoring vs. companies that factor with recourse.
If you factor with full recourse and a customer invoice goes unpaid, you may be required to buy back the invoice and may also be obligated to repay any fees (such as fees for invoice processing, administration, mailing or collection costs) that the factoring company expended in the process.
Does Non-Recourse Factoring Cost More?
Some factoring companies charge more for non-recourse factoring services but many do not. We work with many non-recourse factoring companies whose advance rates and factoring fees are comparable – and often better – than other factoring companies whether they factor with full recourse or without. As our client, you thus get the added protections of factoring with a non-recourse factoring company without additional cost with factoring companies that offer additional benefits; such as:
| Reduced Expenses |
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| More Options |
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| Maximum Benefits |
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Benefit for benefit, we’re confident we can help you find non-recourse factoring services with some of the best invoice factoring companies and pride ourselves on our ability to tailor programs that meet the unique financial needs of our clients.
Explore the benefits of non-recourse factoring further by requesting a free, no-obligation quote:
