What does invoice financing with or without recourse mean?
You can choose to sign a factoring agreement where invoices are sold with or without recourse.
Invoice financing without recourse means that the buyer takes over the entire credit risk after you have sold your invoices. You can therefore count on getting paid regardless of whether the invoice recipient is late with their payment or does not pay the invoices.
Invoice financing with recourse means that under certain circumstances unpaid invoices return to the seller. There is usually a deadline, usually 30 days, during which the bank or lender tries to collect the debt if the invoice is not paid. The bank or lender also adjusts the process with you as an invoice purchase customer, to ensure that the relationship with the end customer continues to be good.