What is Non-Recourse Financing?
Non-Recourse Financing is a type of lending where the lender assumes complete responsibility for the collection of debt. If the debt is not collected due to the financial inability of the customer, the lender assumes the loss. In most cases, the lender will have certain carve outs to protect themselves against fraud, voluntary bankruptcy, or violation of certain provisions. This type of financing is preferred by most individuals and entities as the lender can not attach themselves to other assets as a result of a default on the loan. This protects the investor from loss beyond their investment in the property.
