28
May
Exporters selling internationally often face a difficult balance: offering competitive payment terms while protecting their business from non-payment risk.
Factoring helps solve the cash flow challenge by advancing funds against unpaid invoices. However, exporters must choose between recourse factoring and non-recourse factoring.
Understanding the difference is essential for managing financial risk in global trade.
In a recourse factoring arrangement, the exporter remains responsible if the buyer fails to pay the invoice.
Here is how it works:
The exporter ships goods and issues an invoice.
The factor advances...