Document background
The Non-Recourse Promissory Note is a crucial financial instrument in Indonesian business transactions where lenders agree to limit their recovery rights solely to specific collateral assets. This document is particularly valuable in project financing, real estate transactions, and asset-based lending scenarios where the lender accepts the financed asset as the sole source of repayment. The note must comply with Indonesian Civil Code (KUH Perdata) requirements for debt instruments and the Commercial Code (KUHD) provisions for negotiable instruments. It typically includes detailed descriptions of the collateral, specific enforcement mechanisms, and clear non-recourse language that explicitly limits the lender's rights to the designated collateral. This type of note is often used when the asset's value and income-generating potential are more important to the lender than the borrower's general creditworthiness.
