Definition

Referring to a type of agreement where the lender cannot claim the borrower's assets beyond certain limits if the borrower fails to repay.

Example

In a nonrecourse loan, the bank can only take the collateral specified in the contract, not any other assets of the borrower.

Conversation

I heard you took out a loan for your business, right?

Yeah, I went for a nonrecourse loan so I wouldn’t risk my personal assets.

That sounds smart! It must give you some peace of mind.

Definitely! I can focus on growing the business without worrying too much.

Synonyms & Antonyms

Root Explanation

Nonrecourse → It is formed from "non-" (meaning not) and "recourse" (from Latin "recursus", meaning a running back or return). The word "nonrecourse" means not having the option to seek repayment or return in a financial context.

Memory Tip

Think of 'not' ('non-') having the ability to 'return' ('recursus') — that's why nonrecourse means you can't go back for repayment.

Visually Confused Words