A convertible loan is a specific type of loan that combines elements of debt financing with the possibility to converting the debt into an equity share in a company. This loan gives the creditor the right to convert his loan debt into shares or other forms of equity capital if specified conditions are met. The main advantage of a convertible loan for the creditor is the possibility to gain a share in the future growth of the company's value, which can yield a higher return on investment compared to traditional debt financing. This transfers part of the risk to the creditor, who has the opportunity to take advantage of potential profits from the growth of the business. The transfer of debt to an equity share is also advantageous for the debtor as it allows for the more flexible structure of financing and reduces the immediate burden of debt repayment. A convertible loan may be attractive for startups and growing companies that need funding for the development while also wanting to retain a larger share of ownership in their company. The conditions of the conversion, including the price of the conversion, the date and procedure, are usually agreed upfront between the creditor and the debtor. These conditions may vary and depend on the specific agreement between the two parties. A convertible loan is therefore an instrument that combines elements of debt and ownership, providing the creditor with the opportunity to benefit from the growth of the company's value and the debtor with flexibility in the financing structure. We will prepare a convertible loan contract for you that meets your specific requirements and takes into account the particularities of the given case, together with draft contractual provisions in your favour. Legal advice within this service includes: