In recourse factoring, the vendor bears the risk if the customer does not pay the invoice back. Alternatively, non-recourse means that the factor and not the vendor absorb the risk. So if customers go bankrupt or don't pay the invoice, for whatever reason, the factor has to pay the invoice. In this situation, the amount of risk the factor takes on will depend on how much of the invoice the customers are likely to pay. The factor is providing protection for a portion of the invoice. Both types of factoring take advantage of a factoring agreement to get paid.