Benefits of a Recourse Loan
Are there any benefits of Recourse Loans? Or are non-Recourse loans always a better decision? Specifically for large apartment building purchases.
Most Popular Reply
I think recourse loans make you a better borrower and make you really analyze your acquisition prospects more carefully when buying and your financial structure/need for debt when refinancing. I am not bothered by the recourse ability of a lender personally and have obtained many loans personally over the years with recourse provisions and personal guarantee requirements. As a lender, I am always curious when potential borrowers ask about personal guarantees being necessary and/or whether the loan is a recourse loan or non-recourse loan. With the exception of some limited entity borrowers whose structure requires the loan to be non-recourse. The rest of the borrowers are in essence asking me, "if I don't pay you as agreed, am I personally okay?"