# What is recourse?

Source: https://launch-rec.com/glossary/recourse. Category: Funding. Market: US and UK.

## 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.

## 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

- https://launch-rec.com/glossary/invoice-factoring
- https://launch-rec.com/glossary/payroll-funding
- https://launch-rec.com/glossary/bad-debt