Limited recourse(redirected from Limited Recourse Finance)
A term describing a type of loan in which the lender has limited or no claim against the parent company if the collateral is insufficient to repay the debt. See:Nonrecourse.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Describing a loan that is secured up to a certain amount. For example, a loan on which one-third of the principal is secured or collateralized is a limited recourse loan. These loans may be used in project finance; a company may issue a bond with limited recourse for the first five years of its life, after which it becomes fully secured. Limited recourse loans carry lower interest rates than without recourse loans. In the event of liquidation, limited recourse debt is paid after secured debt and before unsecured debt.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved