Recourse Carveout Exposure Calculator

Non-recourse has carveouts. This calculator sizes exposure.

Loan balance

Carveout trigger probability %

Partial recourse % of loan

Personal exposure

$500,000

Max exposure if triggered

$10,000,000

Expected loss

$500,000

How the math works

Max exposure = loan × partial recourse %. Expected = max × trigger probability.

$10M loan × 100% partial × 5% trigger = $500k expected personal exposure. Operational discipline keeps trigger probability below 2% — meaningful risk reduction. Worth internalizing for multi-deal sponsors.

How to Use

Enter loan balance.
Enter carveout probability %.
Enter partial vs full recourse %.
Read personal exposure.

Frequently Asked Questions

Typical carveouts?

Fraud/misrepresentation. Misapplication of rents (rent collected, not paid to lender). Insurance deductible violation. Environmental breach. Voluntary bankruptcy. Waste (failing to maintain). Each triggers full-recourse conversion under most CMBS/life co loans.

Full vs partial?

Full springing: carveout triggers full-loan recourse to guarantor. Partial: caps at specific amount (e.g., security deposit mismatch = deposit amount). CMBS typically full springing. Life co: often partial. Negotiate down carveout scope at loan signing.

Protection?

Rigorous property management. Insurance audits. Environmental compliance. Clear rent flow (never commingle). Avoid voluntary BK. Full documentation of decisions. Sponsor education across portfolio. Carveout triggers are preventable with operational discipline.

When does a lender negotiate vs foreclose?

Lenders calculate their net recovery from foreclosure (asset value minus legal, time, and sale costs) and compare to any workout proposal. If your offer nets the lender more than foreclosure, and you present it with clear sources of capital, most lenders will engage. Bring a credible sponsor, documented sources, and a timeline — vague asks get declined. Build the relationship before distress, not after.