2 min read
Definition
Under non-recourse finance, the lender’s recovery on default is limited to the specific asset or cash flow being financed — not the borrower’s other assets. Non-recourse factoring is a common example.
In plain terms
If the deal goes wrong, the lender takes the ring-fenced asset and cannot come after the rest of your business. That protection costs more in rate or fees.
Why it matters for your company
Non-recourse structures cap your downside on a single project or debtor book, useful for isolating risk. Contrast with recourse finance, where you carry the risk. See factoring.
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