Definition of Non-recourse:
(of a loan) made to finance a particular project, with the condition that the projects profits are the only assets out of which the borrower is legally obliged to repay the loan.
Situation where an obligation is entered into, or a transaction is conducted, under the stipulation that it is without recourse to the borrower, endorser, or seller. That is, he or she is not personally liable (beyond the specific collateral pledged, if any) to the lender, holder, or buyer for any default, loss, or defect. Presence or absence of recourse determines whether a sale is actually a sale for accounting purposes (hence non-taxable) or is a transfer of ownership (hence taxable). See also recourse, sans recourse and with recourse.
How to use Non-recourse in a sentence?
- John was the primary key principal on a non-recourse loan. Since it was non recourse , he was not liable if the loan did not perform.
- The transaction was created to be non-recourse so the terms of the transaction are clear and finite and expected to end soon.
- You should always know everything that is in a non-recourse deal before you ever decide to sign on the bottom line.
Meaning of Non-recourse & Non-recourse Definition