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Wealthy Credit Limited
RECOURSE LOANS VS NON RECOURSE LOANS:
KNOWING THE DIFFERENCE
Recourse and non-recourse loans allow lenders to claim assets if borrowers default on their obligations and fail to repay their debts.
Lenders can take possession of any assets used as collateral to secure these loans. Many loans are backed by one or more assets of specific value that the lender can claim if the borrower does not fulfill their obligations as outlined in the loan agreement.
The primary difference between the two is that a recourse loan favors the lender, while a non-recourse loan benefits the borrower. The distinction between recourse and non-recourse loans comes into play if money is still owed after the collateral is sold.
Recourse loans allow lenders to pursue other assets owned by the borrower if there’s a balance remaining after the collateral is collected. Lenders of non-recourse loans, on the other hand, are prohibited from pursuing a borrower’s other assets, even if there’s an outstanding balance after the collateral is sold.
What is an unsecured business loan?
An unsecured business loan is a form of commercial financing that is not backed by specific collateral. Without collateral, the lender takes on more risk. If you fail to repay the debt, the lender cannot seize specific assets to recoup the loss. Due to this increased risk, you may receive a high interest rate. The lender may also have strict borrower requirements to filter out low-quality applicants.
PERSONAL GUARANTY, UCC LIEN MAY BE REQUIRED
Although these loans are considered unsecured, they may still be backed by other measures. A personal guaranty is a common requirement for unsecured financing, putting you personally responsible for repaying the loan if your business defaults.
A lender may also place a general blanket lien on your business assets. With such a lien, all your business assets become collateral. While an unsecured loan aims to avoid offering specific collateral, you could still risk losing assets if the lender requires a general lien.
How to Apply for Unsecured Business Funding and Non-Recourse Loan
Over 10,000 business owners trust Wealthy Credit Limited as their lending partner. Accessing working capital quickly is often crucial for business survival and growth. We developed a unique financing process that takes just 2 minutes to apply online. We manage the work to get your business approved and funded in as little as 24 hours.
Here is how our simple lending process works:
Step 1: Know how much funding you need
We recommend making a list of anticipated expenses, such as office rent, employee salaries, and equipment needs. Sum these to estimate the financing amount required.
Step 2: Contact our consultant online and apply
It couldn’t be easier. Our online application involves three simple steps. There’s a reason we’re rated 5/5 on Trustpilot and Google reviews—we prioritize ease of funding and quick approvals.
Step 3: Have recent bank statements ready
A dedicated lending advisor is assigned to you as soon as you apply. We reach out to understand your financing needs and answer any questions. Your advisor handles all paperwork, so you don’t have to.
Step 4: Get funded!
The money is wired to your bank account in as little as 24 hours. We treat you like family and want to see you succeed, so we’re available when your business needs additional capital in the future.
