Non-Recourse Freight Factoring
A freight factoring structure where the factor absorbs credit losses if an approved broker or shipper fails to pay, in exchange for a higher discount rate.
What it actually covers
Non-recourse protects against credit failure of an approved customer. It does not protect against disputes, chargebacks, or non-performance by the carrier. Reading the definition of 'credit failure' in the agreement matters more than the label.
For carriers with concentrated exposure to a small number of brokers, non-recourse can be the difference between a survivable bad debt and an existential one.
Related Entries
See how this structure is used in practice.
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