When nurse staffing firms start researching funding options, one essential question emerges: Should we choose recourse or non-recourse factoring? Both funding types offer quick access to cash, but the difference in liability can impact your agency’s risk and cost.
This guide explains each option clearly and helps you choose the right fit for your staffing model.
At a Glance: Recourse vs Non-Recourse Factoring
| Feature | Recourse Factoring | Non-Recourse Factoring |
| Cost | Lower (1–3%) | Higher (3–6%) |
| Risk | Agency absorbs unpaid invoices | Factor absorbs insolvency risk |
| Client Non-Payment | Agency must buy back | Factor covers approved insolvency-only |
| Typical Use Case | Healthcare staffing | High-risk sectors |
| Availability | Widely available | More limited |
What is Recourse Factoring?
In recourse factoring, your staffing agency is responsible if your client fails to pay the invoice.
Why Nurse Staffing Agencies Prefer It
- Lower costs
- Higher advance rates
- Healthcare clients rarely default
- Facilities usually have strong credit profiles
Best For:
- Nurse staffing firms with reliable facility contracts
- Agencies wanting low-rate funding
What is Non-Recourse Factoring?
Non-recourse factoring means the factor absorbs the loss if the client becomes insolvent (bankruptcy, closure). This does not cover disputes or slow payment.
Why Agencies Consider Non-Recourse
- Added protection
- Peace of mind for new clients
Best For:
- Agencies billing new, unproven facilities
- Firms working across multiple states or systems
Which Should Nurse Staffing Firms Choose?
Choose Recourse Factoring if:
- Your clients are hospitals, long-term care facilities, or health systems
- You want the lowest fees
- Your payment risk is low
- You need maximum cash flow
Choose Non-Recourse Factoring if:
- You work with unfamiliar or smaller facilities
- You want additional risk protection
- You are entering new markets
Final Recommendation
For most nurse staffing firms, recourse factoring is the most cost-effective and practical option in 2025. Healthcare payors have strong credit, making the risk of default minimal. Non-recourse is useful under special circumstances but isn’t necessary for most agencies.
PRN Funding can help you compare both structures and choose the right approach for your roster and client list.
