Glossary · Funding
What is Recourse
Definition
Who carries the loss when a client does not pay. Under recourse funding the agency buys the debt back; under non-recourse the funder absorbs approved credit losses.
Applies to: US and UK · Reviewed by James Doyle
In practice
Non-recourse is insurance, and it is priced like insurance. It only covers insolvency of an approved debtor — disputes over timesheets or service quality remain yours in almost every agreement.
For a young agency with a small number of large clients, non-recourse on the anchor account is often worth the premium.
Related terms
Invoice factoring
Selling your unpaid invoices to a funder at a discount for immediate cash. The funder advances most of the invoice value, then pays the balance on settlement.
ReadPayroll funding
A facility that pays your contractors each week and is repaid when your client settles the invoice, removing the cash gap from the agency's balance sheet.
ReadBad debt
Invoiced revenue that will never be collected. In contract staffing it is doubly painful because the contractor has already been paid.
Read
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