Non Recourse Loans

We offer non recourse loansnationwide, however the typical minimum loan amount is $2,000,000 and the entire loan request has to be solid.  Due to the credit crisis, less lenders and banks are willing or able to offer non recourse commercial loans and instead want full personal guarantees.  Many traditional banks are taking this a step beyond and now are demanding all of the borrowers bank related business (or a fair chunk of it), if they are to grant them their loan request.  Ie, banks want the borrowers deposits, checking, savings, etc.  If you are interested in getting a quote on a non recourse commercial loan, please fill out our loan application completely, so that we can give you meaningful answers.

Here, we discuss some of the more common questions we receive regarding non recourse

Non Recourse Loan:  A loan agreement under which the collateral securing a loan is the ultimate source of repayment, and the lender cannot hold the borrower personally liable in the event of a default. The lender can seize (and sell) the collateral but cannot seize non-pledged asset or property.

Recourse Loan:  Loan agreement under which a borrower gives an undertaking to repay a debt even if the funded asset (acquired with the loan proceeds) cannot be liquidated to cover the loan amount. In case of a default, the lender can seize and sell the funded asset as well as the borrower's un-pledged assets or properties.

Carve Outs - Non Recourse Loans

Often, on non recourse loans the lenders will state something like "this is a non recourse loan, with standard carve outs.  What they mean by this is if the borrower where to default on the loan, and the lender was not made whole (get all of their capital back), by selling the pledge building/assets in foreclosure, that they would have the right to go after the borrowers other assets.   This is a tricky area, and obviously one that the borrower should consult with their attorney on.  Essentially, in concept it is a lot like a more typical recourse loan, where the lender will liquidate the pledge assets first, than go after the rest of the borrower assets to be made whole.

Get Pre Approved now on your loan request.