Financial reserves are crucial assets that provide a buffer to ensure stability and sustainability for organizations or governments during unforeseen economic disruptions. They help in managing liquidity, mitigating risks, and ensuring operational continuity without relying on additional borrowing.
Recourse factoring is a financial arrangement where a company sells its accounts receivable to a factor but retains the risk if the customer defaults on payment. This means that if the customer's debt proves uncollectible, the company is obligated to buy back the receivable from the factor or replace it with another, potentially more collectable one.