What are the major disadvantages faced by a company in case of Hypothecation and Pledge of its Assets?

The most important flaws that the foreclosure process indicates that the financial matters of the company is sound

The company's legal status was tainted by some mystery

Mortgage on the company generates other benefits and obligations of the mortgage banks and mortgage expenses decoder, which negatively affect the company's business Tejh

Mortgage is not a typical way to build a strong reputation of the company and the company's shares fall in the stock market

  Mortgage leads decline in demand for the company's shares

You will end up losing the assets you pledged if you are unable to pay the loan.

In case of non payment of loan, the banks or financial institutions can

1. get the possession and sell the assets

2. Appoints receiver from the court

3. can face blockage of bank accounts in case of non payment.

4. can face legal controversaries

Since the practice of 'Pledge & hypothecation' provides security interest in  goods to the lender, the lender generally offers the loan at a lower rate of interest than on an unsecured loan.

But in case of default on the loan, the lender has a right to sell such pledged or hypothecated goods.