Convertible loan note (CLN)

This is a hybrid form of short-term debt finance wherein funders offer a company a loan that is interest-bearing and repayable and could be convertible into shares of that company at their discretion or when certain circumstances occur. CLNs are a way for a company to raise finance rapidly and before full equity funding rounds. Investors are typically allowed to receive a discounted share price based on the company’s future valuation.

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