Just as there are potential benefits, you also need to be aware of the risks that can come with asset-backed finance. Some can have huge long-term implications for your company.
−       Credit report: Like any other asset finance company, Nucleus will run a credit check [PH1] as part of our decision-making process. This will show up on your company credit score – and potentially affect your ability to secure funding in future.
−       Charges: You can incur charges if you fail to make a repayment on time. This can also apply if you decide you want to pay off your asset-backed finance ahead of schedule.
−       Lower than valuation: Your assets may have a certain value, but it doesn't mean you can borrow that same amount. You may only be offered a percentage, which is because there are costs to convert those assets to cash – as well as any potential loss of value.
−       Not all assets are considered: We look to consider all assets when you need funding. But there are some assets that some lenders won't accept as collateral – depending on the situation. We can advise what you can and can't put forward when you contact us.
−       Lose assets: The biggest risk, of course, is losing your assets if you fail to repay what you owe. A lender could take control of business-critical equipment and property.