Non-recourse financing entitles the lender to repayment only from the profits of the project which the loan is funding. No other assets of the borrower can be seized to recoup the loan upon default.

What is a nonrecourse loan and who benefits from it?

Benefits of Non-Recourse Loans

Non-recourse loan financing provides extensive benefits to borrowers, including: Your personal assets are not tied to the loan, meaning even if you default on loans, the lender can only seize the collateral but cannot go after your personal assets.

What does non recourse mean in lending?

A non-recourse loan is one where, in the case of default, a lender can seize the loan collateral. However, in contrast to a recourse loan, the lender cannot go after the borrower's other assets—even if the market value of the collateral is less than the outstanding debt.