In a factoring transaction, the factor retains the right to recover the amount from seller, if payment is not recovered from the buyer of goods. This is called

Recourse factoring makes up most of the accounts receivable financing industry. Recourse is an understanding between you and your factor that your company must buy back receivables that the factor cannot collect payment on. You, the client, must cover the cost of any invoices your customers do not pay. With a non-recourse account, however, the factor accepts more of the risk of non-payment by your customers.