Are you at the starting point of your business? Need some more funds? Looking for some potential investors? Then convertible notes could be an easy way out for you. Today convertible notes have become the most useful method of arranging a good amount of capital for every individual enterprise. At the starting point of a business, every enterprise needs one thing the most. Yes, we are talking about enough capital. No matter how brilliant your business plan is you won’t be able to execute it until you have enough funds. And exactly here convertible notes help the best. It involves sharing some equity with the investors in return for a good amount of cash. So are you planning to go for this brilliant way of raising funds? Then give this article a read. Here we are listing some pros and cons of convertible notes that one must know before applying for it.
Pros of convertible loans
According to the top business analysts, a Convertible loan note is a smart way to increase the overall capital of your newly launched business. There are some great pros of applying for convertible loans such as
- As the owner of an enterprise, you are in a safe position even if you choose to go for a convertible note. Here you don’t have to sell the actual share of ownership with your investor. You can consider it a loan. Here you still have the option to return the borrowed money and close the deal.
- The policy of convertible notes doesn’t allow an investor to have the right of voting on different types of corporate matters. So if you are having the fear sharing control with your investor then we can assure you that it’s never going to happen.
- With a convertible note, your enterprise will become economically stronger within very less time. Generally, every business owner struggles a lot financially in their beginning stage. And exactly here this convertible note could give some major financial relief.
- When you choose this convertible loan note you don’t have to return the amount through money with a higher rate of interest. Instead of paying money, you can share equity which reduces the financial headache.
Cons of convertible notes-
Although the convertible note is a smart choice for most business owners but still there are some cons that you must know.
- If your company fails to perform well then you won’t be able to return the borrowed money. So it completely depends on the work productivity and success rate of your company.
- Sometimes finding the potential investors becomes extremely difficult here.
Thus to conclude, all these pros and cons are reported by the users of convertible notes. So yes you can rely on our shared information. So check out things again and apply for a convertible loan if you need some immediate cash. Good luck.