What does “Recourse Period” mean in Invoice finance & Factoring?
Most invoice finance/factoring facilities have what is called a Recourse Period. This is usually the maximum period that an invoice will be funded for.
Once this period is passed you may be required to pay a refactoring fee or if its a bad debt, repay the borrowing.
A typical recourse period would be around 90 – 120 days.
Recourse Period Example
If your Recourse Period is 90 days, then any funded invoices need paying by your client within that period.
Recourse Period: 90 Days
Credit Terms: 60 Days
In this example if your customer pays more than 30 days late, you could be liable for an additional refactoring fee.
Are you looking to set up an Invoice Finance or Factoring facility?
If so we can help you get quotes, negotiate offers and set u a new facility.
Fill in the form below or give us a call.