Types of Factoring
Recourse Factoring
This is where the lender provides the funding and also the credit control function. However, if the invoice remains unpaid past the agreed recourse period the invoice will be passed back to you as the client.
Non Recourse Factoring
As above but this includes a credit protection policy. As long as the invoices issued are within the preagreed credit limits for a particular client the debt is protected and invoices will not be reassigned back to you as the client.
Confidential Factoring
This is where the lender undertakes all credit control as the actual client. The lender still undertakes the credit control but your customers are unaware of any involvement.
CHOCS (Client handles Own Collections)
This is where there is a disclosure notice on each invoice but you as a client handle the credit control. Similar to disclosed invoice discounting but you send through full details of each invoice.
Confidential CHOCS
As above but there is no notice of assignment on the invoices. This means that you notify each invoice but your customers are not aware of any lenders involvement.