3 Ways Non-Recourse Factoring Helps Your Business
Fluctuating economic conditions affect all types and sizes of businesses, but smaller service businesses can be hit the hardest. Most service companies operate on a slim margin, and a sudden delay in cash flow can be disastrous. This is why JOBE Services, Inc. in Humble, Texas, chooses to only provide non-recourse factoring to help small and medium-sized businesses.
If you are unfamiliar with factoring, then the difference between recourse and non-recourse factoring may mean nothing – but it can when your Texas business needs cash fast without overburdening your company with debt.
Factoring vs. Non-Recourse Factoring
Factoring is simply selling your unpaid invoices to another company for immediate cash. Most service businesses operate on the invoice system, where clients are invoiced for services you provide and have 30, 60 or even 90 days to pay the invoice. This can leave your company waiting for cash you need right now. Selling your invoices provides you the cash when you need it, and the factoring company collects payment from your client.
The difference between recourse (or plain factoring) and non-recourse factoring is significant.
- Factoring holds you responsible for the client’s promised payment – if your client doesn’t pay the invoice you sold to the factoring company for any reason, you are responsible to pay the entire amount, including the factoring fee. There may also be other penalties involved, costing you even more.
- Non-recourse factoring does not hold you responsible for the client’s promised payment – when the factoring company agrees to buy your invoice, they assume all the risk. You are not responsible for any unpaid invoices, regardless of the reason for nonpayment. You are only out the factoring fee.
3 Major Benefits of Non-Recourse Factoring with JOBE Services, Inc.
Here’s how non-recourse factoring is superior to plain factoring, and why you should always choose non-recourse factoring for your business.
Your Clients’ Creditworthiness is Evaluated – Not Your Credit
When JOBE Services, Inc. considers factoring your invoices, we do not pull your company’s credit – there is no harm to your credit at all. We consider the creditworthiness of your client that owes you money. We base our decision to accept the risk based on that, not on your company. This is especially helpful for small or startup businesses without an established credit rating or reputation.
Any Non-Payment Issues Do Not Harm Your Reserve Assets
When JOBE Services, Inc. agrees to factor your invoices, we assume all the risk. You will not be liable if your creditor fails to pay what they owe. This protects your reserve assets from the unexpected risk of paying an unpaid invoice. When we accept the risk, that’s it. You are in the clear.
There are No Long-Term Contracts
Many factoring companies require a long-term contract to help protect against creditors that may default on payment. You are forced to use their factoring service longer than you wish or for accounts you do not wish to involve. Non-recourse factoring from JOBE Services, Inc. requires no long-term contracts and we have no hidden fees. Use our service once, whenever you need us in a pinch or for regular accounts receivable. It’s your choice – and there is only one small fee per invoice.
Contact us today if your small business in Texas needs cash now for operations or expansion. Let us introduce you to non-recourse factoring, the most risk-free way to get cash now for your company.