What is "non-recourse with carveouts"

Question

I've been researching commercial financing. I get non-recourse vs. recourse. But what is "non-recourse with carveouts?"

From what I can find, it's a workaround for lenders to have recourse on non-recourse loans, but I'm a cynic.

What does it actually mean, and what other assets can they "go after" in the unfortunate event of default?

Bryan Hancock · Answer

“Carve-out” is a broad term for dealing with contracts. In the context of CRE loans carve-out means the language lenders insert in the loan documents to deal with so-called “bad boy provisions.” Here are some good articles on this:

Non-Recourse Commercial Loans & Standard Carve Outs

‘Bad Boy’ Guarantees - Courts Are Enforcing Non-Recourse Carve Out

I wouldn’t stress too much about these if your attorney is okay with them. This is standard in non-recourse loans now because of bad behavior on the part of borrowers.

Darryl Dahlen · Answer

What Bryan said.

What is "non-recourse with carveouts"

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