What is an important factor that distinguishes non-recourse loans from recourse loans?

The important factor that distinguishes non-recourse loans from recourse loans is the way in which the lender can seek repayment in the event of default. In a non-recourse loan, the lender's recovery is limited solely to the collateral specified in the loan agreement. This means if the borrower defaults, the lender can only seize the collateral and cannot pursue the borrower's personal assets or other financial resources. This is in contrast to recourse loans, where the lender has the right to pursue the borrower for any remaining balance after the collateral has been seized, thus allowing them to attempt to collect from the borrower's other assets.

Higher interest rates, slower approval processes, and collateral seizure are not defining characteristics of non-recourse loans. Interest rates can vary based on a range of factors and are not solely determined by the recourse or non-recourse nature of the loan. The approval process could also be similar between the two types of loans depending on the lender's policies. Thus, the critical distinction lies in the limitations placed on the lender's recourse in the event of non-payment.