what is non recourse finance 
non recourse finance is a type of commercial lending that entitles the lender to repayment only from the profits of the project the loan is funding and not from any other assets of the borrower such loans are generally secured by collateral a non recourse loan more broadly is any consumer or commercial debt that is secured only by collateral in case of default the lender may not seize any assets of the borrower beyond the collateral a mortgage loan is typically a non recourse loan understanding non recourse financenon recourse financing is a branch of commercial lending that is characterized by high capital expenditures distant repayment prospects and uncertain returns in fact it is similar in character and risks to venture capital financing for example say a company wants to build a new factory the borrower presents a bank with a detailed plan for the construction in addition to a business plan for the greatly expanded production that it will enable the company to undertake repayment can be made only when the factory is up and running and only with the profits of that production the lender is agreeing to terms that do not include access to any of the borrowers assets beyond the agreed upon collateral even if they default on the loans payments will only be made when and if the funded projects generate revenue if a project produces no revenue the lender receives no payment on the debt once the collateral is seized the bank cannot go after the borrowers in hopes of recouping any remaining losses non recourse loans and recourse loans are subject to different tax treatments in the u s 1