Loan Notes – We have some exciting, high performance offers

A loan note can help an individual avoid an undue tax hit due to a lump-sum payment from a settlement or cash-out package.

Loan Notes – The Most Popular Form of Investing in the Alternative Investment Sector

Loan Notes Can Be Very Tax Efficient

Aloan note is a contract for a loan that specifies when the loan must be repaid and also the interest payable on that loan. It is similar to a promissory note but the differences can be significant in terms of consequences, especially tax consequences.

Legally Binding Agreement

It is considered a legally binding agreement, with both parties, considered committed to the terms as they are written. A loan note can be drawn up by either borrower or lender, though it is more traditionally completed by the lender. The note is considered valid until the amount listed on the document is paid in full by the borrower.

Too Attractive to Ignore

Many of our clients and other professional investors are finding that the benefits of investing in developer loan notes are too attractive to ignore.
The high rate of fixed interest paid gives them a huge advantage over the lower and fluctuating yields paid by way of dividends in the stock market. With investment capital guaranteed, investors don’t suffer the volatility suffered by stock market investors.

NB:

A loan note can help an individual avoid an undue tax hit due to a lump-sum payment from a settlement or cash-out package.

Why is a Loan Note attractive for Investors?

The reasons why investors may consider a Loan Note favourably include:

1. The investors can negotiate favourable investment terms by negotiating the cap and discount to apply on conversion. They get more upside.

2. Often, the loan will convert into the most senior share class. Investors on a convertible loan note get the upside of the best available terms on the equity round, without having to negotiate those terms.

3. The investors can consider whether it wishes to charge interest on the loan, or other favourable terms.

4. The investors will achieve a higher priority to founders if the company fails. The loan is a debt. Debt is paid in priority to the claims of shareholders in a liquidation.

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