Convertible Loan Calculator
Estimate the conversion amount of your convertible loan to equity. Input your loan amount, interest rate, and conversion terms to calculate the conversion value.
Calculate Convertible Loan Conversion
What is a Convertible Loan?
A convertible loan is a type of loan that can be converted into equity or shares of the borrowing company under certain conditions. It allows the borrower to postpone equity dilution, while the lender gains the option to convert the loan into ownership if certain milestones are met.
How to Use This Calculator?
- Enter the loan amount of your convertible loan.
- Specify the annual interest rate of the loan.
- Enter the loan term (in years) to calculate the total interest.
- Provide the conversion price per share to calculate how many shares the loan will convert into.
Why Convertible Loans Matter?
- Flexibility for Borrowers: Convertible loans allow businesses to delay the decision on equity issuance until a later date.
- Attractive to Investors: Lenders can convert loans into shares, benefiting from the potential appreciation in the value of the company.
- Manage Debt and Equity: Convertible loans balance the need for financing with the desire to minimize dilution for existing shareholders.
Example Calculation
Assume the following details:
- Loan Amount: ₹10,00,000
- Interest Rate: 8%
- Loan Term: 5 years
- Conversion Price: ₹500 per share
Results:
- Total Loan Amount with Interest: ₹12,00,000
- Number of Shares: 24,000 shares