Recourse vs. Non-Recourse Factoring
Factoring is an often-misunderstood financial tool for small to medium-sized businesses. The confusion mostly stems from the difference between recourse and non-recourse factoring and how they each affect your company. For those businesses that have tried recourse factoring, the experience may have been less than positive. This is why JOBE Services, Inc. in Texas only provides non-recourse factoring – we want to help businesses, not saddle them with extra burdens.
What is Factoring?
Factoring is a financial tool that allows you to get cash quickly from outstanding invoices. Many companies offer their services in advance and then invoice clients for what is owed, often allowing 30, 60 or even 90 days for payment. As you can imagine, this can put a crimp on your cashflow while you wait for invoices to be paid.
With factoring, you sell your invoices to a financial company for a small fee or percentage of the invoice. You get your money now and the financial company collects the outstanding invoice from your client on schedule.
What is the Difference Between Recourse and Non-Recourse Factoring?
Where some have encountered a snag is with recourse factoring. With this type of factoring, if your client does not pay the invoice for any reason, you owe the financial company the entire amount of the invoice, including their factoring fee. The financial company has a “recourse” if they do not get paid – they come back after you.
JOBE Services, Inc. only offers non-recourse factoring. With this method of factoring, we buy your invoices for a small fee and you get your money quickly, sometimes the same day. And we collect our money from your client. If for any reason your client does not pay the invoice, we do not come back to you for our money back. After we approve and pay an invoice, you are in the clear.
JOBE Services, Inc. in Humble, Texas
At JOBE Services, Inc., we evaluate your creditors and assume the risk for their credit worthiness, taking that burden off your company. This can be a huge relief for small to medium businesses that do not have the reserve assets to cover non-payment issues. We offer completely transparent, no credit-risk non-recourse factoring with no hidden fees and no long-term contracts.
Does non-recourse factoring sound like it could help your Texas business? Give us a call today at 281-947-3832 to discover how factoring with JOBE Services, Inc. can become an important resource for your company’s success.