What is the difference between recourse and non-recourse commercial loans?

In a recourse commercial loan, the lender can pursue the borrower's personal assets if the property's value does not cover the loan balance after default and foreclosure. The borrower personally guarantees the debt. In a non-recourse loan, the lender's only remedy upon default is to seize the collateral property — they cannot go after the borrower's personal assets. Non-recourse loans are more favorable to borrowers but harder to qualify for and typically require stronger DSCRs, lower LTVs, and more established sponsors. Most non-recourse loans contain carve-outs (bad boy guarantees) that convert the loan to full recourse for specific bad acts like fraud or environmental violations.