Non-Recourse Loan
A non-recourse loan generally limits lender recovery to specified collateral, subject to guarantees, carve-outs, and applicable law.
Compare recourse and nonrecourse lending, deficiency exposure, guarantees, carve-outs, and the limits on recovery beyond collateral.
Recourse determines whether a lender may pursue a liable borrower or guarantor after applying collateral proceeds. A recourse loan can leave the borrower responsible for an enforceable deficiency, while a non-recourse loan generally assigns an ordinary collateral shortfall to the lender.
The labels are only a starting point. Limited guarantees, liability caps, burn-offs, indemnities, anti-deficiency laws, and springing-recourse provisions can change who bears a loss. Security and recourse also answer different questions: collateral defines property available to the creditor, while recourse defines liability beyond that property.
Use this section to compare recovery sources, identify liable parties, and distinguish an ordinary payment shortfall from conduct-based liability. Always read the loan, security, guarantee, and enforcement provisions together; outcomes depend on the documents, jurisdiction, and facts.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
A non-recourse loan generally limits lender recovery to specified collateral, subject to guarantees, carve-outs, and applicable law.
A recourse loan permits the lender to pursue the liable borrower or guarantor beyond collateral for an enforceable unpaid balance.