Glossary definition
Non-Recourse Loan
A loan where the lender's sole remedy in the event of default is to enforce against the secured property, with no additional claim against the borrower's other assets or personal wealth. True non-recourse lending is rare in UK development finance; most facilities include personal guarantees or at minimum bad-boy carve-outs that provide recourse in cases of fraud or wilful misconduct.
Definition
A loan where the lender's sole remedy in the event of default is to enforce against the secured property, with no additional claim against the borrower's other assets or personal wealth. True non-recourse lending is rare in UK development finance; most facilities include personal guarantees or at minimum bad-boy carve-outs that provide recourse in cases of fraud or wilful misconduct. Some institutional and family office lenders offer non-recourse terms on lower-risk deals.
See also
Closely related terms.
Personal Guarantee (PG)
A legally binding commitment from an individual, usually the developer or company director, to personally repay some or all of a loan if the borrowing entity defaults.
Facility Agreement
The legal contract between a borrower and a lender that sets out all terms and conditions of the loan including the facility amount, interest rate, drawdown mechanics, repayment terms, covenants, and events of default.
Senior Debt
The primary layer of debt in a development finance structure, secured by a first legal charge on the property and sitting at the bottom of the capital stack with first priority on repayment.
Further reading
Guides that touch this term.
Guide
Legal Due Diligence in Development Finance: What Solicitors Check
Legal due diligence is the backbone of every development finance transaction. This guide explains what solicitors investigate, common issues that delay completions, and how to prepare your legal pack.
9 min read readReadGuide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readReadGuide
Development Finance vs Bridging Loans: Which Do You Need?
Two of the most common short-term property finance products, but they serve very different purposes. We break down the rates, terms, and scenarios where each makes sense.
8 min read readRead
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