May be necessary in some cases, to advance working capital to a company. If it becomes necessary to finance your accounts receivables a factor ( a company that handles this type of financing) works under a recourse or non-recourse modes. In most cases, it is generally done in a "non-recourse," mode whereupon the factor would bear any losses from unpaid accounts. However, non-recourse is generally more expensive to the company. The company maintains its normal course of sales to a customer but, turns over the accounts receivable function to the factor - for a fee. The main objective of using a factor is when a company cannot finance further working capital and the delays of collecting are starving the company of cash resources.
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