ITC provides non-recourse factoring, the industry’s best choice for price and value
Recourse Factoring vs. Non-Recourse Factoring
Recourse factoring is the lowest cost option for converting invoices into immediate cash and offers the best value with the fewest restrictions on funding.
A recourse factoring agreement places an obligation on your trucking company to buy back an invoice if your customer fails to make payment within 90 days. However, the back-office efficiencies and collection services of ITC minimizes the incidence of non-payment, diminishing this obligation.
Non-recourse factoring claims to absolve the trucking company of the obligation to buy back unpaid invoices, but be careful as it is not that definite. Often, the non-recourse agreement is only valid if the debtor declares bankruptcy. If non-payment is due to any other circumstance, you as the factoring client remain obligated to buy back the invoice.
Non-recourse comes with greater credit restrictions than recourse factoring, yet generally costs 25% to 35% higher for minimal protection. Talk to a factoring specialist to get a clear understanding prior to choosing either of these options.