What Are the Best Tips for Non-Recourse Factoring?
Non-recourse factoring refers to the factoring company's right to recourse with the supplier after the transfer of funds to the supplier through creditor's rights transfer. The factoring agent alone bears the risk of the buyer refusing to pay or unable to pay.
Non-recourse factoring
- Chinese name
- Non-recourse factoring
- Definition
- Factoring mobilizes funds from suppliers
- Mainstream status
- Non-recourse factoring business
- in accordance with
- Claims
- Non-recourse factoring refers to the factoring company's right to recourse with the supplier after the transfer of funds to the supplier through the transfer of creditor's rights.
- The factor waiver by the factoring agent is relative. It can be agreed according to the contract. Generally speaking, when the debtor has credit risk (ie, inability to pay or bankruptcy, liquidation, etc.), it waives the right to recourse. When the account receivable cannot be recovered, the factorer still has recourse against the supplier.
- In the current international factoring business, the dominant factor is the non-recourse factoring business. No recourse factoring is not that under no circumstances the factorer has no recourse against the supplier. The difference between no recourse factoring and recourse factoring is that the latter causes receivables for any reason. When the account cannot be recovered, the factoring agent can exercise the recourse against the supplier, while the former factoring agent relinquishes the recourse is relative. It can be agreed according to the contract. Generally, the debtor's credit risk (that is, inability to pay) (In the case of bankruptcy, liquidation, etc.), if the receivable right is waived and the receivable cannot be recovered due to the dispute over the commercial contract dispute, the factorer still has the right to recourse against the supplier. At present, the only factoring policy in China, the "Notice on the Management of Foreign Exchange Collection and Verification under the Export Guarantee Agency Business", adopted this concept. Therefore, absolute non-recourse is almost non-existent, which has reached consensus in the industry. The author believes that it is not accurate enough to simply set the distinction between recourse factoring and non-recourse factoring as "whether the factorer has recourse against suppliers" in some works.