Introducing Nomads Home: Lexidy’s Work From Anywhere Platform – Go Borderless Today! 🗂✅🖥
 
 

Convertible Equity Loans

Get the financing your startup needs to scale new heights

What is a Convertible Equity Loan Agreement?

A Convertible Equity Loan Agreement loan is an investment product that mixes the characteristics of two similar financial products: convertible notes and equity loans.

These investment products share the common characteristic of being non-traditional debt securities. This means that they combine the rules of stock products and traditional debt products, like loans and bonds, to create a new one. These are often called hybrid securities.

How can a Convertible Equity Loan Agreement help my startup?

Both the convertible note and equity loan are, in their own right, great products for financing seed-phase startups. Therefore, combining both only enhances their benefits but how do they differ?

Convertible Note

A classic convertible note is a type of bond that’s issued by corporations and is convertible to company stock under certain circumstances.

It works as a normal note or bond most of the time but the difference is only felt on repayment day. Unlike a normal note, the investor will have the right to be paid in stock, instead of money. 

This characteristic makes them a good choice to finance startups in the seed stage, as they allow investors to fund a company but defer the task of valuation until a later stage, when there are more elements to assess it.

Equity Loan Agreement

An equity loan allows the investor to have a percentage of the company’s profits for a period of time without having to become a shareholder. However, this debt is one of the lowest in terms of seniority and can not be repaid early unless an equivalent share capital increase takes place.

 

A Convertible Equity Loan Agreement works is by establishing two different interests in the contract. First, there is a fixed interest that repays the loan debt. There’s also variable interest in the event that the company makes a profit, so the investor is rewarded in line with the company’s performance.

This is one of the best types of startup financing as it allows the payment of little interest if it is not successful, which is very common. It strengthens the company’s balance sheet and positions it to receive even more financing and a company with a Convertible Equity Loan Agreement projects an image of trust to other institutional investors.

What are the requirements?

There are no formal requirements to arrange and secure a Convertible Equity Loan Agreement

The challenge is to convince a financial institution of your venture’s prospects and persuading them to partner with you. Typically, a company needs a well-drafted business plan with a high potential of expectation to compensate the investor if there is success. It’s this balance that makes this loan typical for startups in the seed phase.

Lexidy is a modern, dynamic, and innovative law firm. We always put customers at the center of our work and do our best to give an exceptional experience. Our expertise in Spain and Portugal allows us to solve complex problems thoroughly and cut all the risks before they may happen.
0
The number of Golden Visas issued with Us
0
How many clients we assisted in 2020
0
Our average score from 300 reviews

Find you Corporate Lawyer

How can a lawyer help me?

Investment agreements are one of the most creative and unregulated fields in Spanish Corporate Law. There are significant risks in agreements like this and not just financial ones. 

As there’s so much freedom to draft this type of agreement, including the clauses and conditions that the parties deem necessary, there are also potentially greater risks for you to consider. 

Our Corporate Lawyers at Lexidy LegalTech Boutique have the necessary expertise to help you design the legal document that best suits your case, either in the form of an Equity loan, Convertible Note or Convertible Equity Loan Agreement.

¨We will be with you each step of your journey.¨

– Immigration Team

Be happy. Join a community of satisfied and successful customers

Bella F.
Bella F.
19:09 11 Jan 23
I'm so over this crowd. Paid a huge deposit 2 YEARS AGO just to be passed from pillar to post. I'm now on lawyer number 5 - all the others left the company - go figure. I'm moving on to a different firm and will be requesting a refund. Don't waste your time and money like I did. I agree with other reviews that the positives are probably sponsored
Ryan Rich
Ryan Rich
12:47 17 Aug 22
Lexidy has helped us so much in both the business and immigration side. We continue to use them for all legal needs and recommend them highly.
Ali Delshad
Ali Delshad
11:49 26 Jul 22
First of all, I would like to appreciate all the team members of Lexidy for helping me to get my residency card.I had a great experience especially on the SEF appointment day with their kind and helpful Brazilian expert which made my experience smooth and without stress.When you decide to work with this law company you should notice that you don’t just pay for lawyers but also for the quality, respect and safety.I’m totally happy with the processes and quality of their job.
Foysal Miah
Foysal Miah
20:47 25 Jul 22
It’s been more than two years now, I have known Lexidy and their amazing team. This company peoples are so active and helpful especially Karla. She is very kind and patience. Really appreciate your job and helping us to get a better future.
RICHARD BRITTON
RICHARD BRITTON
21:46 29 Jun 22
We contacted Lexidy Law boutique when we recently moved from Cyprus to open a new chapter in our lives to move into a house in Brittany that we had bought 12 years previously. We had underestimated the twists and turns involved in obtaining residency in France - so we contacted Lexidy Law Boutique and were assigned Eleonore, an immigration lawyer well acquainted with French immigration laws. From the very beginning we realised she was determined that we should have a successful outcome and she guided us expertly to avoid all the pitfalls in the process of applying for residency. She even accompanied us to the prefecture and ensured that everything went smoothly - without her presence we might well have not succeeded.We thank and highly recommend Eleonore and Lexidy Law Boutique.
Declan Ryan
Declan Ryan
20:48 01 Jun 22
The Lexidy team is uniquely positioned to provide pan-European business and tax advisory services; what would be complex or impossible for a country-specific advisor is straightforward for Lexidy. They answered in days what would take weeks for other firms.
Rick Kleinhans
Rick Kleinhans
13:03 27 Apr 22
Lexidy has been a lifesaver. The entire team has helped us so much on different matters both personal and corporate. Isabel in correcting an error by a previous accountant that was costing us an extra €1000 every month in social security payments! Jose with various matters and tax advice. Diego in helping us get documents notarized in Valencia even though he is based in Madrid. I cannot recommend them enough!
Aleksandar Vorinski
Aleksandar Vorinski
08:12 25 Apr 22
I recently purchased apartment, got NIE and opened bank account with their help. I m satisfied with their service, they are accurate and responsible.
A
A
17:31 24 Apr 22
I’ve dealt with hundreds of solicitors through business over the years but I must say Cristina and Lexidy Law are really something special. Responsiveness, proactiveness, knowledge and professionalism is, quite frankly, outstanding.M.
Sarah Taylor
Sarah Taylor
11:03 31 Mar 22
Lexidy did an amazing job setting up our company in Spain, which was a complicated and lengthy affair which they handled with patience and professionalism. Their ongoing tax, accounting and payroll services have been greatly appreciated. Friendly and professional team with perfect English. Highly recommended!
Jonas Hendrickx
Jonas Hendrickx
15:50 03 Dec 21
The labour law advice I was looking for. Delivered the answer quoting the law texts in Spanish as requested to make sure I was actually getting the correct answer for my question!These people are worth your money.
Kristen Wilkinson
Kristen Wilkinson
14:53 20 Oct 21
Update: While all of the initial responses were pretty quick, they started getting busy, so I had to constantly follow up. We have since sought assistance elsewhere.My husband and I plan to move from the USA to Porto, Portugal in the spring/early summer of 2023. We didn't know where to start or what to expect. I searched online and found Lexidy Law Boutique. Their website is intuitive, informative and inviting. I emailed the office and Lidiane responded within a few hours. Based on the information in my email, she emailed us appropriate information on our situation. She was very professional and offered to set up a web call if we wanted to. We ended up having our web call today and will be starting our journey of becoming Portuguese citizens. She informed us of the first steps, all of the documentation we need and what the law firm can do for us. Right after our call, she emailed us detailed information regarding pricing and what is entailed in that pricing. So far, the beginning of our journey is a positive one.
Parisa Fardad
Parisa Fardad
05:20 21 Sep 21
I have started to work with this company which was my friend recommendation. My first experiences have been very good. They are responsive, friendly and cares about their costumers.
Thijs van de Laak
Thijs van de Laak
05:16 15 Sep 21
I experienced good, constructive and accurate service by Lexidy in composing my SHA. Thanks Hector and Samual
陳震東
陳震東
07:43 08 Sep 21
Samuel is very professional and patient. Really appreciate.
Erik van der Linden
Erik van der Linden
00:01 08 Sep 21
I contacted this company regarding a Labour dispute with a former employer. I quickly got an honest response that according to Spanish Labour laws, nothing could really be done anymore. Impressed with their swift, direct and honest opinion, I explained this was a very unusual case and would like to hire their services. Again I got a swift and direct answer that they did not deal with those kind of cases. Rather than milking a client, they showed admirable integrity by turning down the case…. a rare quality these days. My compliments.
Signore Raffaele
Signore Raffaele
12:53 07 Sep 21
The service I have received from Hector has been extraordinary.He has helped me opening bank accounts, managing my NIE and setting up my company's branch in Spain.I am very grateful for the help and the exceptional treatment and management.I won't hesitate to contact him again for any other business I may need.
ZULFU S.R.O
ZULFU S.R.O
16:40 04 Sep 21
We used Lexidy to help establish our company in Spain. The whole team and especially Samuel, were very helpful and professional. Their customer service is excellent. Prices are reasonable. Highly recommend.
Siguientesjs_loader

Related Services

Non-Lucrative Visa

Visa for Non-EU nationals who wish to live in Spain without performing any economic activity.
Read More

Buying a house in Spain

Visa for Non-EU nationals who wish to live in Spain without performing any economic activity.
Read More

Tax Anlysis

Visa for Non-EU nationals who wish to live in Spain without performing any economic activity.
Read More

How can we help you?

Subscribe to our newsletter

Stay ahead of the changes that matter to you.

icon