Recourse vs Non-Recourse Commercial Loans

Understand how sponsor liability can differ between recourse and non-recourse commercial structures.

Immediate answer

A recourse loan can make a guarantor responsible beyond the collateral, while a non-recourse structure generally limits recovery to the collateral subject to stated carve-outs and obligations.

The Structure Is Transaction-Specific

Property type, cash flow, leverage, sponsor strength, program, and loan documents all affect whether recourse or non-recourse is available.

Non-Recourse Still Has Obligations

Non-recourse should never be read as no responsibility. Fraud, misapplication of funds, environmental issues, and other carve-outs may create liability.