{"id":27238,"date":"2025-06-23T10:00:00","date_gmt":"2025-06-23T08:00:00","guid":{"rendered":"https:\/\/cysae.com\/?p=27238"},"modified":"2025-06-23T10:00:00","modified_gmt":"2025-06-23T08:00:00","slug":"what-is-a-convertible-loan","status":"publish","type":"post","link":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/","title":{"rendered":"What is a convertible loan?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">A convertible loan is a financing method commonly used by startups, combining a convertible loan with a participating loan.  <\/span><\/p>\n<p><span style=\"font-weight: 400;\">A participating loan is one in which the lender participates in the company&#8217;s benefits, meaning it depends on the results of the company. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, when we refer to a convertible loan, the lender has the opportunity to become a shareholder in the company. <\/span><\/p>\n<h2><b>Characteristics: <\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Variable interest rate: First, the interest rate of the loan is variable. A fixed interest rate can be established, but what is important is that this type of financing is linked to the company\u2019s results.  <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Equity participation: The loan can form part of the net worth of the company in the event of capital reduction or liquidation of the company, thereby improving the company\u2019s solvency ratio and its ability to pay off debts. <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Anticipated amortization: In order to carry out the anticipated amortization, the loan should be prior to any capital increase or allocated to compensation. In this way, the rest of the creditors will not be prejudiced.  <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Subordinated debt: With subordinated debt, the lender is only paid after the company\u2019s shareholders and other creditors. <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">And, in addition, the interest on the loan is deductible as a financial expense in the corporate income tax (CIT). <\/span><\/li>\n<\/ul>\n<h2><b>Advantages: <\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The biggest advantage is that it is an attractive financing option for lenders. Since it is a participating loan, it could be considered that it carries a higher risk because it depends on the company\u2019s results, but by combining it with a convertible loan, that risk is reduced, as lenders have the option to become company shareholders.  <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">On the other hand, the company also obtains financing with lower risk and no immediate dilution of existing shareholders&#8217; equity. <\/span><\/li>\n<\/ul>\n<h2><b>Disadvantages: <\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For shareholders, it can lead to a loss of control over the company, especially when lenders have the option to convert the loan into equity, resulting in dilution of their ownership in the company. <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For lenders, it carries the possibility of not recovering the investment if the company does not perform well and does not generate good results. <\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Additionally, the subordination to other debts is a disadvantage for lenders. <\/span><\/li>\n<\/ul>\n<h2><b>ENISA <\/b><\/h2>\n<p><span style=\"font-weight: 400;\">ENISA (National Innovation Enterprise) is a public company that currently offers this type of financing. To access it, the company must meet a series of requirements.  Among others: <\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company must be domiciled in Spain and have operations in Spain.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company must be an innovative business model.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That the SME has been established in the last two years prior to the funding request.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In short, this is a very advantageous option for both the lender and the company, as it is a financing method that offers great flexibility for both parties. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A convertible loan is a financing method commonly used by startups, combining a convertible loan with a participating loan. A participating loan is one in which the lender participates in&#8230;<\/p>\n","protected":false},"author":27,"featured_media":27144,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[440],"tags":[733,786,795,789,794,790,798,793,796,787,797,799,788,791,792],"class_list":{"0":"post-27238","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-commercial","8":"tag-business-financing","9":"tag-convertible-loan","10":"tag-debt-ratio","11":"tag-enisa-en","12":"tag-financial-solvency","13":"tag-flexible-financing","14":"tag-interest-deduction","15":"tag-loan-capitalization","16":"tag-non-dilutive-financing","17":"tag-participating-loan","18":"tag-risk-for-lenders","19":"tag-sme","20":"tag-startup-financing","21":"tag-startups-en","22":"tag-subordinated-debt"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a convertible loan? - Cysae<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is a convertible loan? - Cysae\" \/>\n<meta property=\"og:description\" content=\"A convertible loan is a financing method commonly used by startups, combining a convertible loan with a participating loan. A participating loan is one in which the lender participates in...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/\" \/>\n<meta property=\"og:site_name\" content=\"Cysae\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-23T08:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/\",\"url\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/\",\"name\":\"What is a convertible loan? - Cysae\",\"isPartOf\":{\"@id\":\"https:\/\/cysae.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg\",\"datePublished\":\"2025-06-23T08:00:00+00:00\",\"author\":{\"@id\":\"https:\/\/cysae.com\/#\/schema\/person\/41e0acac845526c290609ba450225855\"},\"breadcrumb\":{\"@id\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#primaryimage\",\"url\":\"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg\",\"contentUrl\":\"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg\",\"width\":2560,\"height\":1707},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Portada\",\"item\":\"https:\/\/cysae.com\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What is a convertible loan?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/cysae.com\/#website\",\"url\":\"https:\/\/cysae.com\/\",\"name\":\"Cysae\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/cysae.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/cysae.com\/#\/schema\/person\/41e0acac845526c290609ba450225855\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/cysae.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/cysae.com\/wp-content\/litespeed\/avatar\/23494c9101089ad44ae88ce9d2f56aac.jpg?ver=1775633062\",\"contentUrl\":\"https:\/\/cysae.com\/wp-content\/litespeed\/avatar\/23494c9101089ad44ae88ce9d2f56aac.jpg?ver=1775633062\",\"caption\":\"admin\"},\"url\":\"https:\/\/cysae.com\/en\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is a convertible loan? - Cysae","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/","og_locale":"en_US","og_type":"article","og_title":"What is a convertible loan? - Cysae","og_description":"A convertible loan is a financing method commonly used by startups, combining a convertible loan with a participating loan. A participating loan is one in which the lender participates in...","og_url":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/","og_site_name":"Cysae","article_published_time":"2025-06-23T08:00:00+00:00","og_image":[{"width":2560,"height":1707,"url":"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/","url":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/","name":"What is a convertible loan? - Cysae","isPartOf":{"@id":"https:\/\/cysae.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#primaryimage"},"image":{"@id":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#primaryimage"},"thumbnailUrl":"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg","datePublished":"2025-06-23T08:00:00+00:00","author":{"@id":"https:\/\/cysae.com\/#\/schema\/person\/41e0acac845526c290609ba450225855"},"breadcrumb":{"@id":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#primaryimage","url":"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg","contentUrl":"https:\/\/cysae.com\/wp-content\/uploads\/2025\/06\/pexels-fauxels-3184465-scaled.jpg","width":2560,"height":1707},{"@type":"BreadcrumbList","@id":"https:\/\/cysae.com\/en\/what-is-a-convertible-loan\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Portada","item":"https:\/\/cysae.com\/en\/"},{"@type":"ListItem","position":2,"name":"What is a convertible loan?"}]},{"@type":"WebSite","@id":"https:\/\/cysae.com\/#website","url":"https:\/\/cysae.com\/","name":"Cysae","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/cysae.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/cysae.com\/#\/schema\/person\/41e0acac845526c290609ba450225855","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/cysae.com\/#\/schema\/person\/image\/","url":"https:\/\/cysae.com\/wp-content\/litespeed\/avatar\/23494c9101089ad44ae88ce9d2f56aac.jpg?ver=1775633062","contentUrl":"https:\/\/cysae.com\/wp-content\/litespeed\/avatar\/23494c9101089ad44ae88ce9d2f56aac.jpg?ver=1775633062","caption":"admin"},"url":"https:\/\/cysae.com\/en\/author\/admin\/"}]}},"_links":{"self":[{"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/posts\/27238","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/comments?post=27238"}],"version-history":[{"count":1,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/posts\/27238\/revisions"}],"predecessor-version":[{"id":38667,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/posts\/27238\/revisions\/38667"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/media\/27144"}],"wp:attachment":[{"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/media?parent=27238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/categories?post=27238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cysae.com\/en\/wp-json\/wp\/v2\/tags?post=27238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}