Why Non-Recourse Invoice Factoring Is Popular
If you are thinking about getting a loan, reconsider. Have you heard about invoice factoring before? If you haven’t, it is well worthwhile to learn more about it. Today, we are going to talk about what non-recourse factoring is and the main reasons why your business needs it.
What Is Non-Recourse Invoice Factoring?
Non-recourse factoring is the process of selling your invoices to an invoice factoring company. The company purchases your outstanding invoices and gives you an advance of up to 96%. Then when the client pays the invoice off, the factoring company will return the rest of the sum to you, except for a small factoring fee.
There are many different types of invoice factoring and non-recourse is one of them. Basically, this means that it is risk-free. With recourse factoring, there is a chance you have to buy back the invoice from the company in the case that the client defaults on the invoice. Yet, with non-recourse factoring, you don’t have to buy the invoice back if the client defaults. This makes the transaction more secure for you, yet more risky for the factoring company. There are numerous benefits of non-recourse factoring. To see just a few, take a look below.
1. Non-Recourse Invoice Factoring Risk-Free
Do you need a reliable way for financing your business? If you have invoices then factoring is one of the best options for risk-free financing. Factoring is debt-free and gives you the finances you need to be consistent with your payroll, bills, or staying on top of your other important financial needs.
2. Non-Recourse Invoice Factoring Is Easy To Obtain
Don’t have credit or have bad credit? That’s not a problem with non-recourse factoring. Because factoring is based upon your client’s credit and not yours, you can easily be approved for factoring even if you don’t have good credit.
3. Non-Recourse Invoice Factoring Is A Quick Process
Once you apply for a loan it is typically a simple, fast process. Once the factoring company approves the invoice, you will receive the cash advance within 24 hours. No more waiting for weeks to even months for a bank loan to be approved. With invoice factoring, you get the money you need as quickly as possible.
4. Non-Recourse Invoice Factoring Can Build Your Credit
Is your company trying to build back good credit? We understand it can be difficult to build good credit, especially when you don’t have the funds to continue operating your business. Rather than get a loan and put your company in more debt, factoring is the best solution to get the money you need and improve your credit by paying your bills in time.
5. Non-Recourse Invoice Factoring Is Easier Than A Bank Loan
Bank loans are notorious for taking a long time to be approved and received. Not only do they take a long time, but they also put your business in debt and are very hard to come by. If you are looking for the most convenient, easiest and safest way to get the funds you need to run your business, then non-recourse factoring is the best solution.