These two terms determine the nature of an invoice factoring contract. Recourse factoring is the most common form of factoring that companies offer. Recourse factoring means that the burden of unpaid invoices is on the business owner if customers fail to pay before the deadline ends. The business owner pays the factoring company the value of outstanding invoices at the end of the contract. Non-recourse factoring means that the factoring company takes all the responsibility for all unpaid invoices. All initial deposits are paid, and rebates are usually not involved in non-recourse factoring.  Factoring companies that provide non-recourse factoring services charge more service fees. This high service fee is due to the amount of risk the factoring company takes on. The responsiveness of customers is the problem of only the factoring company.