Paragon Financial Group is funding during the COVID-19 crisis.

What is Non-Recourse Factoring & Credit Protection?

The traditional Non Recourse Factoring through Credit Protection program is unique. Protect yourself against customer bankruptcy or insolvency. Statistics show that less than 20% of accounts receivable factoring companies utilize credit protection as part of their factoring product. Factors have the superior credit strength needed by large insurers that allows us to offer non-recourse factoring credit protection. Although credit protection is not inexpensive, factors care about their clients and feel it is required to protect them adequately. After the volatility of the last ten years, factors think it is more important now than ever. In life, there is only one thing worse than no sales, and that’s selling your service or product and not being paid.

What is Non-Recourse Factoring & Credit Protection?

Non-Recourse Factoring & Credit Protection Lowers Risk

The Meaning of Non-Recourse Factoring

Non-recourse factoring or factoring without recourse is an agreement within a factoring contract where the factoring companies client does not have to pay back the factoring company if an invoice is not specifically paid due to a bankruptcy of the client’s customer (the Account Debtor) under an invoice with credit protection in place. Factoring companies offer Credit Protection as part of our Non-Recourse Program.

With a non-recourse factoring program, we become your de facto credit department! Factors currently manage the A/R credit protection, collections, and cash advances for clients receiving payment to us on their behalf from Walmart, Comcast, Neiman-Marcus, Textron, Time-Warner, AT&T, the US military, and many state/local/city governments, to name a few.   Factoring companies are not a collection agency hounding companies for bad debt. Factors only manage, protect, and advance against substantial invoices from reputable and creditworthy companies. If they do not make your customers happy, they do not get to manage your A/R. You will have one and only one college-educated relationship manager assigned to your account with 10+ years of experience. Factoring companies, like Paragon, is famous for our “soft touch” with account debtors (your clients).

How Does Traditional Non-Recourse Factoring Credit Protection Work?

Each one of your customers will have a predetermined credit limit: For example, $30,000-$3,000,000 per month. What a factoring company advance you plus the factoring fees will be covering for bankruptcy protection via their policy. Factors will always pre-approve your customers before funding your invoices.  Your salespeople will have a pre-approved list on whom to solicit for new sales — no wasting time on potential clients who don’t pay their bills. Also, as your clients make payments regularly with excellent credit history, we can raise their credit protected limits.

Find out more information on how non-recourse factoring works.


For over 27 years, Paragon Financial Group has provided working capital solutions for growing and non or under-bankable companies throughout the United States.

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