No personal liability. Lenders may take the property pledged as collateral to satisfy a debt, but have no recourse to other assets of the borrower. Many lenders will offer non-recourse loans with “carve-outs†for waste, fraud or environmental issues.
Refers to a dealership whose arrangement with its "financing" sources is such that the dealership is relieved of any responsibility for its customers’ auto loans. Other than supplying background information on the applicant, this kind of dealership relies solely on the loan application decisions the bank makes. (See Recourse.)
No personal liability. Lenders may take the property pledged as collateral to satisfy a debt but have no ability to take the other assets of he borrower.
Where finance is raised to purchase a leased asset, the lender will have recourse to the assets held by the lessee in case of default, but not to the lessor/borrower.
A mortgage or deed of trust securing a note without recourse allows the lender to look only to the security (property) for repayment in the event of default, and not personally to the borrower. A loan not allowing for a deficiency judgment. The lender's only recourse in the event of default is the security (property) and the borrower is not personally liable.
A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. These types of projects are characterised by high capital expenditures, long loan periods, and uncertain revenue streams.
A type of borrowing in which the borrower (or Lessor in our context) is not at-risk for the borrowed funds. The lender is expecting repayment from the Lessee and/or the salvage value of the leased equipment; hence, the lender's credit decision will be based upon the creditworthiness of the Lessee, as well as the expected salvage value of the leased equipment.
A type of borrowing in which the borrower (a lessor in the process of funding a lease transaction) is not at-risk for the borrowed funds. The lender expects repayment from the lessee and /or the value of the leased equipment; hence, the lender's credit decision will be based upon the creditworthiness of the lessee, as well as the expected value of the leased equipment.
A loan that is secured by collateral, usually property. If the borrower defaults, then the issuer can seize the collateral, and the borrower is not personally liable.