What is a recourse loan? Well, most loans are recourse, so whenever you sign a promissory note, it says, “I promise to pay,” and whenever you sign that, it obligates you to pay the amount that is set forth in the promissory note, or in the loan documents. Almost all commercial paper and any loans that you get from banks or financial institutions, loan companies, anyone else, is it is going to be what they call recourse; means they have a right to sue you.
The opposite of recourse is non-recourse, and that is whenever the note says that they will not look to the maker for payment; they will look only to the collateral. So, probably the better question, or answer, to that is: is that you want to sign non-recourse paper, meaning that they can’t sue you if for any deficiency they take back whatever collateral it be, whether it be automobiles or real estate. However, it is difficult to obtain these loans and most lenders want you to be personally liable for the loans or have recourse paper or a recourse loan.
If you have any questions about that, give me a call at 727-847-2288.