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Recourse & non-recourse factoring
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Cash flow challenge: I need to release cash from unpaid invoices - but I’m not sure who takes on the risk.
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Perfect for: Businesses looking to improve cash flow by factoring invoices, but need clarity
on the trade-off between cost and protection.
With invoice factoring, you can unlock fast access to unpaid revenue - but who’s responsible if your customer doesn’t pay?
This page helps you understand the difference between recourse and non-recourse factoring - and how Novuna can help you find the right facility.
Our invoice finance options
Pages in this SectionWhat is recourse and non-recourse factoring?
When you factor an invoice, the finance provider advances you a large percentage of the invoice value upfront. But what happens if your customer fails to pay?
That’s where the difference between recourse and non-recourse factoring comes in:
- Recourse factoring: Your business is ultimately liable if the customer doesn’t pay. This option is usually cheaper, but risk stays with you.
- Non-recourse factoring:The finance provider takes on the risk of non-payment. It typically costs more, but gives you protection against bad debt.
Understanding these models is key to choosing the right factoring arrangement for your business.
How it works with Novuna Business Cash Flow
- Tell us about your invoices and risk appetite and complete a short form or call
- We compare providers and recommend a facility that fits your business
- You apply with full support from a cash flow expert
- Get funded fast with the terms and protections that work for you
Fast decisions. Flexible options. Funding over £2bn to more than 1,000 SMEs every year.
Is recourse or non-recourse factoring right for you?
Choose recourse factoring if:
You want the most cost-effective facility
Recourse factoring typically comes with lower fees since you’re retaining the risk of non-payment.
You’re confident in your customers payment reliability
It works best if your customers have a strong track record of paying on time.
You’re prepared to take on the risk if a customer defaults
If an invoice goes unpaid, you’re responsible for repaying the advance to the lender.
Choose non-recourse factoring if:
You want protection against bad debt
Non-recourse factoring includes credit protection, so you’re not liable if a customer doesn’t pay due to insolvency.
Your business can’t absorb the cost of non-payment
You can delay outflows while suppliers still get paid promptly, helping you manage working capital more effectively.
You trade with customers that have inconsistent payment histories
Non-recourse factoring offers peace of mind when dealing with higher risk or unpredictable buyers.
Not sure which is best? We’ll guide you through the options based on your cash flow, customer base, and risk profile.
Novuna can support businesses with a range of funding challenges
I want to release cash from my unpaid invoices
I want a confidential facility with full ledger control
I want to manage which invoices I finance
I want a one-off facility to free up cash quickly
How we help
How Novuna helps businesses access funding fast
Tell us what you need
Start with a simple form or call - tell us your business challenge.
We compare your options
We compare multiple providers to get you the best deal.
Choose the right type of funding
Access a range of short-term funding options including loans, advances, and invoice finance.
Apply with expert support
Get help applying - with a real expert on hand throughout.
Get clear, transparent terms
No jargon, no surprises – just honest advice with no hidden fees.
Receive funding fast
Get access to finance quickly so you can focus on your business.
Why take action now
Don’t let unpaid invoices hold your business back
Improve cash flow without taking on unnecessary risk
Get clarity on which facility suits your goals
Compare your options and avoid high-cost lending
Why choose Novuna Business Cash Flow?
Why businesses trust us with their invoice finance needs
We're highly rated by our existing customers
"The communication and support has been outstanding. Providing me with all the information I needed regarding new clients coming onto our books. The system they use is so user friendly and the drawdown payments are very efficient in the fast moving world of temporary payroll.'
More reviewsWe're a multi-award winning business cash flow specialist
Innovation in the SME Sector 2024
Alternative SME Lender of the Year
SME Lender of the Year 2023
Best Use of Technology 2023
Best Provider 2023
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