#factor select, invoice discounting, factoring, invoice finance, Factoring quote, Recourse Factoring, Credit Control, factoring companies, factoring solutions, web design, IT support, caboodle IT, sales ledger management,
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The terminology recourse and non recourse invoice finance is common place.
Non recourse invoice finance is that which includes insurance against customer bad debts. Recourse invoice finance does not.
With some factors you have the option to pay an additional premium on your administration charge for the benefit of guaranteed cash flow and negate the risk of losses through a customers failure to pay. Stand alone credit
insurance policies are widely available in the UK. Although by using a factor the cost of this is often reduced.
It is sometimes ironic that business managers will insure everything within their business but not that of trade debtors. In reality though what is more likely, one or two of your customers meeting financial difficulty
or your premises experiencing fire or flood? The latter is of course 'disaster' insurance but for a lot of companies the failure of a key customer is certainly a disaster. Not only will this reduce your likely profit
but it will make a hole in your cash flow immediately.
Only you as business managers can answer the cost / benefit question in relation to insuring your debtors and more often than not this is an optional service provided by the factor. It should though be considered by
all businesses and discounted only when you are confident that the cost outweighs the risks.
Not all factors are the same, when it comes to non recourse facilities. The level of cover varies, including importantly likely insured limits applied by different factors to your individual customers. Some factors
do not provide non recourse factoring or invoice discounting at all. Some factors provide just bad debt cover, others bad debt and protracted default and some may include pre-delivery cover. Blue Asset Finance can guide you to those factors better at providing insured cover.
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