A project loan is granted to several companies jointly sponsoring a large project,and the lender can recover funds from such sponsoring companies,if the project does not pay out as planned.This is known as a project loan granted on a recourse basis.

Question

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The statement accurately describes a project loan granted on a recourse basis, where the lenders can seek repayment from the sponsoring companies if the project fails.

A Project Loan Is Granted to Several Companies Jointly Sponsoring