SME Finance for startups & other purposes:
An SME Bond is a hybrid debt/equity instrument that provides a simple and cost-effective way for a startup or early-stage company to source the initial seed funding required to cover off the expenses involved in preparing for an equity crowdfunding campaign (or for any other legitimate business purpose). Since the SME Bond acts as a debt instrument prior to conversion, it can include an interest rate. However instead of paying out cash the SME will pay the investor in shares once the bond is converted.
SME Bonds are negotiated between a lender & a borrower for financing business growth & the sale/purchase of goods & services.
The term ‘SME Bond’ is interchangeable with the terms ‘Promissory Note’ and ‘Note’. SME Bonds are issued under the Bills of Exchange Act 1909.
Other uses for SME Bonds:
Are you selling services (or consulting to business)? An SME Bond is an easy way for you to offer to finance your consulting fees, making your consulting services more affordable to more clients.
Are you selling goods (cars, trucks, boats, educational or training courses, franchises or businesses, etc.)? An SME Bond provides an easy way to quickly set up Vendor finance & repayment terms, making your goods more affordable to more customers.
Personal Property Securities Register: Where you are Vendor financing the sale of goods and you wish to hold ‘security’ over those goods, be sure to backup your loan by registering your interest (over the collateral security asset provided) with the PPSR.
SME Bonds are usually negotiated by private treaty, one-on-one between the entrepreneur and an early adopter or supporter or ‘seller & buyer’, with often no more than a single bond certificate being issued.
Get started by filling out a preliminary application & allow approximately five (5) working days for the transaction to be completed – Apply today.
SME Bonds for more established companies:
An issue of a ‘series‘ of SME Bonds provides a way for early-stage or more established businesses with strong cash flow to raise funds without watering down the existing investors in the company. Investors receive regular interest payments until the end of the bond term and receive their initial investment back at the end as well.
Get started by completing this preliminary application form – Apply today!
SME Bonds are an alternative source of debt financing for small to medium sized enterprises from startups & early-stage to the more established SMEs. SME Bonds serve as an IOU between the issuer & the investor, providing a way to finance SMEs beyond normal cash flow.
SME Bonds explained in 2 minutes:
Credit easing and SME Bonds
Bank lending is no longer the right tool for financing SME’s. Since 2008 and the GFC the SME financing framework has changed dramatically! Bank lending has been shrinking & will reduce further for one simple reason ‘Basel III’.
“Basel III” is a comprehensive set of banking reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector & was developed in response to deficiencies in financial regulation revealed by the global financial crisis of 2007–08.
SME Bonds are encrypted to protect against counterfeiting.