Recourse is the single term that most affects how much risk a stock loan puts on you personally — often more than the headline LTV or interest rate. It answers one question: if the pledged shares fall short, can the lender pursue your other assets? In a non-recourse loan, no — the lender can look only to the shares. In a full-recourse loan, yes — you remain personally liable for any shortfall. Limited-recourse sits between the two. Each profile is legitimate; the right one depends on what you are trying to protect.
The three profiles in one line each
- Non-recourse — the lender's only remedy is the pledged shares; your other assets are ring-fenced.
- Full-recourse — you are personally liable for any shortfall after the shares are realised.
- Limited-recourse — recourse beyond the shares, but capped or conditioned in a defined way.
What recourse actually governs
Every stock loan is secured by the pledged shares. Recourse decides what happens after the lender has realised that security and still faces a gap — for example, if a forced sale of a fallen, illiquid counter raises less than the outstanding balance. Does the loan stop at the shares, or does it reach into the rest of your wealth? That is the whole of the recourse question, and it is why two loans with the same LTV and rate can carry very different personal risk.
| Feature | Non-recourse | Full-recourse |
|---|---|---|
| Lender's remedy | The pledged shares only | The shares plus your other assets |
| Personal liability for shortfall | None | Yes |
| Other assets protected | Yes | No |
| Typical LTV | More conservative | Can be higher |
| Typical pricing | Higher — lender bears more risk | Lower — borrower bears more risk |
Why non-recourse costs more
Risk does not disappear; it moves. In a non-recourse loan, the lender accepts that a price collapse could leave it short with no claim on you — so it prices that risk in and lends more conservatively against the shares. That usually means a lower LTV and a higher rate. A full-recourse loan does the opposite: because you stand behind any shortfall, the lender can advance more, at a finer rate. Neither is "cheaper" in real terms; they allocate the same risk to different parties.
Which is safer — for you?
"Safer" depends on what you are protecting. If your priority is to ring-fence the rest of your wealth — to know that the worst case is losing the pledged shares and nothing more — a non-recourse or carefully limited-recourse structure is the safer choice, and the higher cost is the price of that certainty. If you are confident in the counter and want the largest, finest-priced advance, and you are comfortable standing behind it, full-recourse may suit you. The decision is a personal risk-allocation question, not a pricing optimisation.
How we approach it
We treat recourse as a first-order term, agreed up front as part of the indicative terms rather than buried in documentation. A principal will talk through what each profile means for your specific position and objective, and structure custody and margin mechanics to match. For the wider terms that sit alongside recourse, see how much you can borrow and what a stock loan costs, and the stock loans overview for how the whole structure fits together.
This article is general information about share-backed financing in Indonesia and is not legal, tax, or financial advice. The recourse profile of any facility is set out in its documentation and confirmed with qualified Indonesian counsel.