Recovery Rate

Recovery Rate is the percentage of funds recovered from the sale of collateral after a borrower defaults. It depends on the type of collateral and the jurisdiction. Typical recovery ranges are 60–90% for real estate, 40–70% for equipment, 50–80% for accounts receivable, 30–60% for inventory, and 20–80% for company shares. Recovery rates are not guaranteed and depend on market conditions, the speed of the recovery process, and legal complexity.