Before deciding the type of factoring product to use, it is very important to consider both recourse or non-recourse to determine which is the best option for your business.
Recourse factoring is the most common-type of factoring businesses uses. With recourse factoring, the trucking company retains the liability for the ultimate collectability of the factored invoice. Recourse factoring is available at a lower discount rate. With the help of recourse factoring, you can maximize the most cash for your invoice and it is comfortable with a small reserve. The factor purchases the freight invoice from the trucking the company, but it can become uncollectible for any reason such as file bankruptcy, claim dispute on the load or go out of business which may result in a chargeback to the trucking company.