Non-Recourse Finance

AAA

DEFINITION of 'Non-Recourse Finance'

A loan where the lending bank is only entitled to repayment from the profits of the project the loan is funding, not from other assets of the borrower.

INVESTOPEDIA EXPLAINS 'Non-Recourse Finance'

These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue streams. Analyzing them requires a sound knowledge of the underlying technical domain as well as financial modeling skills.

RELATED TERMS
  1. Assignment Of Accounts Receivable

    A lending agreement, often long term, between a borrowing company ...
  2. Without Recourse

    This phrase has several meanings. In a general sense, when the ...
  3. Non-Recourse Expense

    An accounting term that sometimes refers to the cost of absorbing ...
  4. Collateral

    Property or other assets that a borrower offers a lender to secure ...
  5. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  6. Default

    1. The failure to promptly pay interest or principal when due. ...
Related Articles
  1. Entrepreneurship

    Small Business: Speed Up Receivables To Avoid A Cash Crunch

    Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
  2. Investing

    Off-Balance-Sheet Entities: An Introduction

    The theory and practice of these entities varies greatly. Investors need to learn what they're getting into.
  3. Investing

    What is the difference between a non-recourse loan and a recourse loan?

    The essential difference between a recourse and non-recourse loan has to do with which assets a lender can go after if a borrower fails to repay a loan. As a matter of principle, borrowers almost ...
  4. Active Trading Fundamentals

    What does the gearing ratio say about risk?

    Find out why lenders and investors pay close attention to a firm's gearing ratios, and why both too much and too little borrowing can be risky.
  5. The trick isn’t to buy the stock of the San Francisco-based LendingClub — it’s to become an investor in the loans the company wants to make.
    Stock Analysis

    Investing In (And With) Lending Club

    The trick isn’t to buy the stock of the San Francisco-based LendingClub — it’s to become an investor in the loans the company wants to make.
  6. Investing Basics

    What is the difference between the gearing ratio and the debt-to-equity ratio?

    Dive deeper into gearing ratios: what are they, how are they used and why the debt to equity ratio is one of the most popular analytical gearing tools.
  7. Economics

    What is the difference between loan syndication and a consortium?

    Learn about consortiums and loan syndications, two types of multiple banking arrangements designed to finance transactions that single lenders do not handle.
  8. Economics

    Indian Banking Regulations -- What You Didn't Know

    Through these regulations, the Reserve Bank of India steers India's banking sector away from risk and toward its goals for India's economy and society.
  9. Credit & Loans

    What are the different types of cash advances?

    Find out the different types of cash advances along with their different features to determine which option, if any, is best for you.
  10. Insurance

    What is a collateral assignment of life insurance?

    Learn about collateral assignment of life insurance so you can make a wise decision about what kind of collateral to use for a loan.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center