Recourse factoring

Its counterpart, non-recourse factoring, is widely misread. Non-recourse normally covers only the debtor's insolvency or bankruptcy. Disputes, short pays, service failures, damaged freight, and missing paperwork usually remain chargeable to the carrier under either arrangement. The covered-reason clause matters far more than the label.

In practice. Recourse agreements carry a chargeback window, often somewhere between 60 and 90 days [SOURCE NEEDED], after which the unpaid invoice comes back to you. The factor recovers it from your reserve first and from your next advance if the reserve falls short. Recourse agreements are typically priced lower and often require a personal guarantee.

Example. A $2,400 invoice goes unpaid past the chargeback window. The factor takes the $120 reserve on that load and recovers the remaining $2,280 from advances on your next loads.

Why it matters for your cash flow. A chargeback does not arrive alone. It lands weeks after you spent the advance, and it is recovered from money you were counting on, which is why a single bad debtor can compress several weeks of cash at once.