Home Receivables financing: what is it? Types of receivables financing agreements Recourse factoring

Recourse factoring

Recourse factoring provides flexible and cost-effective financing. It is an ideal solution for fast-growing companies seeking rapid access to liquidity while maintaining controlled financing costs.

What is recourse factoring?

Recourse factoring is an optimal solution for companies that:

  • have significant working capital (WCR) requirements,
  • do not necessarily need protection against debtor insolvency,
  • and primarily want to reduce the administrative burden associated with managing their customer portfolio.

The principle is similar to other factoring structures: once your invoices are assigned to the factor, you receive immediate financing—typically up to 90% of the invoice amount. The factor then manages the receivables and collection process.

The key difference lies in the treatment of unpaid invoices. Under a recourse arrangement, the risk of non-payment ultimately remains with your company. If a customer fails to settle an invoice within the recourse period (generally 90 to 120 days), your business must reimburse the advance received, together with the applicable factoring fees.

How does recourse factoring work?

Assignment of receivables

You transfer your invoices through a secure platform or via a direct connection to your ERP system.

Cash advance

The factor releases up to 90% of the assigned amount within 24 to 48 hours.

Accounts receivable management

The factor can manage invoice matching, cash collection, payment reminders, and debt recovery processes.

Reserve account

A portion of the invoice amount not financed (typically 5% to 20% depending on the agreement) is retained in a reserve account. This amount is released to you once the invoice has been paid at maturity. In the event of non-payment, the reserve is used to cover the outstanding amount due.

Illustration méchanisme

The benefits of recourse factoring

More competitive pricing

Fees are lower than in non-recourse factoring, since the credit risk remains with the company.

Flexible financing

Well suited for regular or seasonal cash flow needs.

Outsourced management

The factor handles monitoring, payment reminders, and collections, reducing your administrative workload.

Growth accelerator

You convert your receivables into cash almost immediately after invoicing, helping finance your working capital needs.

The Fibus promise: accelerating and simplifying the setup of your recourse factoring.

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Frequently asked questions about recourse factoring.

What is the typical duration of the recourse period?

Between 90 and 120 days after the cash advance, depending on the contract terms.

Can recourse factoring be combined with credit insurance?

Yes, and it is often highly recommended. Companies frequently add external coverage through a credit insurance policy to reduce their exposure to the risk of non-payment.