Non-Recourse Debt

Non-Recourse Debt

A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults.

Notes:

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

As a taxpayer, you cannot claim a tax loss any greater than the amount of equity you put into the loan.

See also: Collateral, Debt, Default, Non-recourse Finance, Project Finance