What is a convertible loan agreement?
Process and Pricing for Convertible Loan Agreement
After you have fulfilled the checkout process, we will send you a form where you will out a few details about yourself, your company and your company structure. Once this has been filled out we will start working on your Convertible Loan Agreement. This takes on average 1-2 working days.
The total price is: €250.00 ex. vat. This amount will be invoiced once this form is completed.
The total price is: €250.00 ex. vat. This amount will be invoiced once this form is completed.
What is a convertible loan agreement?
A convertible loan is a loan that can at some point be converted into shares. Because it is always difficult at a startup to give a realistic valuation of the company, you agree that the valuation of the shares will take place at a later time, for example when a new investor joins. It is customary to agree on an interest rate which is added to the loan and which is also converted into shares. A convertible loan is a loan that can at some point be converted into shares. Because it is always difficult at a startup to give a realistic valuation of the company, you agree that the valuation of the shares will take place at a later time, for example when a new investor joins. It is customary to agree on an interest rate which is added to the loan and which is also converted into shares.
FAQ about Convertible Loan Agreement in the Netherlands
With a convertible loan, you agree that the investor will receive shares in exchange for his investment. You postpone the moment when the investor receives his shares, because you do not yet know exactly what your company is worth. At a certain point, the investment is “converted” from a loan into shares in the company. This can be a pre-agreed date, or when a certain condition is met. The number of shares that the investor will receive is only finally determined later. Also, a range is agreed upon, so that you are not left to chance.
Should I use a fixed-rate interest or Euribor rate?
By linking your interest rate to the Euribor interest rate, it is possible to take out a convertible loan with a variable interest rate. A variable interest rate follows the developments in the money markets and can change daily, whereas a fixed interest rate remains unchanged for an agreed period. Depending on the situation in the market, a variable interest rate can therefore be more advantageous than a fixed rate. But beware, it can also be more expensive. If you prefer not to run any risks, choose a fixed interest rate.
The level of the Euribor interest rates is determined by supply and demand. It is a market interest rate that is set by a large number of European banks and is strongly influenced by economic conditions such as economic growth, the level of inflation, the creditworthiness of banks, mutual trust and consumer confidence.
Which Euribor rate should I use?
Loans that banks contract with each other do not always have the same maturity. That is why there is a Euribor rate for loans with a duration of 1, 2, 3, 6, 9 and 12 months. Do you doubt about the right rate for your situation? Then please contact your accountant or tax adviser.