Factoring contract with recourse or without recourse

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Other factors offer deals with no minimum, which usually cost more overall. You should therefore check with your factor to understand the terms of the contract. Some factoring companies require a commitment for a specific period of time (usually one year). If you do not meet the required duration by terminating the contract early, you will be subject to penalties.


Quality of service
Quality of service is a crucial criterion that you should not overlook. This canadian cto cio email list is because factoring is a buyer-centric task. Entrusting your receivables to a factor could affect your customer relationship. Therefore, it is important that a factor like Bibby Factor is easy to reach and provides results quickly. You should choose a factoring company that can provide results within 24 hours of confirmation. The factor should be able to provide your business with cash inflows as soon as you need them.


There are two broad categories: recourse and non-recourse. Recourse factoring makes you responsible for handling all outstanding receivables. This type of arrangement is the more common of the two. Non-recourse arrangements involve your factor taking charge of all outstanding receivables within specific, well-defined limits and conditions.

The reliability of the factor
You must necessarily ensure that the factor is in full legal standing. You must therefore inquire about the sources of financing of the factor itself to have a guarantee that it will not stop financing without any reason and without warning you.