Risks Associated with Debt-Based Crowdfunding
Risks Faced by Investors
Risk of Loss of Capital
An investor may lose part or all of their capital if the financed business defaults on repayment.
Risks Faced by Institutional Beneficiaries include but not limited to:
Creditworthiness Assessment
SMEs undergo financial and credit evaluations, which may limit their chances of obtaining financing.
Repayment Obligations
SMEs are required to repay financing on schedule. Failure to do so may lead to legal action, reputational damage, or restrictions on future financing.
Legal and Regulatory Risks
SMEs must comply with all regulatory requirements. Any breach may result in penalties or enforcement actions.
Risks Related to Collateral
Where collateral is required, SMEs risk losing it if they fail to meet repayment obligations.
Important Notes
• The listing of any investment opportunity on Alraedah Invest does not constitute investment advice.
• Alraedah conducts due diligence and discloses information about each opportunity, but the investment decision remains solely the responsibility of the investor.
• Investors should only commit funds they can afford to lose, and SMEs should only request financing that matches their repayment capacity.