Know How to Pick the Right Plan
Factoring is a great way to get cash fast to keep your business running. Some factoring companies offer recourse and non-recourse options. But do you know the difference between them? Find out how each factoring plan impacts your business if your customer doesn’t pay.
What is Recourse Factoring?
Recourse factoring is the most common type of invoice factoring. If a factoring company can’t collect from your customer (a broker or shipper) for any reason, you’ll need to cover the cost of the invoice. If your customer goes out of business, files bankruptcy, or if there’s a dispute or claim, you still have to buy back the unpaid invoice, sometimes called a “charge back.”
What is Non-Recourse Factoring?
Non-recourse factoring is where the factoring company covers the cost of the invoice if your customer doesn’t pay for credit reasons. Under this plan, the factoring company will take the hit if there’s a problem with payment.
Here’s everything you need to know
Picking the right plan for your business depends on who you’re hauling for and how quick your customers pay. When you talk to Apex, give us a list of your customers so we can help you find the plan that works best for you. We can tell you which options we offer and what plans are available.
Rates can vary between recourse and non-recourse plans too, so it’s important to ask us all of your questions. You need to get as much information as possible in order to pick the right plan. To learn more about factoring, check out the answers to frequently asked questions on our website.
Protect yourself with credit checks
Whether you chose recourse or non-recourse factoring, you can protect your business by running credit checks on the people you haul for. This helps you avoid getting stuck with unpaid invoices from brokers and shippers who might be slow to pay. To make sure you’re hauling for the right customers, it’s important to do your homework and run a credit check. Apex offers our clients free, unlimited credit checks and gives you detailed credit information, so you know exactly how much a broker or shipper is approved for. No smiley faces or stop signs here!
Apex even helps with the collections process. We build strong relationships with you and your customers, so we can stay on top of your account and make sure you’re getting paid faster. No matter what plan you choose, factoring can be a great way for you to get cash fast.
Call or email us today to learn more about how our factoring programs can help you keep more of your money in your company where it belongs. Call 1-855-369-APEX or get started here.