SME Bonds are hybrid debt/equity instrument that provides a simple and cost-effective way for early-stage and established companies to secure private funding for growth capital or acquisition.
SME Bonds Debt Finance
SME Bonds act as a debt facility prior to conversion to equity. It can include an negotiated interest rate. Instead of paying out cash at maturity, the business owner will pay the investor in shares once the bond is converted. Ideal facility for vendor finance where the debt can be repaid or refinanced at maturity. Highly beneficial for new owners to build trading history.
SME Bonds for alternative lending
Purchasing of SME investment bonds are like giving a private loan to the business entity. The Bond investor and Bond Issuer negotiates the term, security, conversion and cost of the Bond.
What is a SME Bond?
A hybrid debt / equity instrument that provides a direct and cost-effective avenue for established companies to raise capital.
How does it Work?
Bond investors receive regular interest payments until the end of the SME Bond term and the initial principal invested is repaid in full.
SME Bonds for Growth
- A new source of financing on the debt capital SME side. The Basel III regulatory banking measures have placed a squeeze on lending, and already impacting on SME’s seeking finance across the globe.
- As a result growing companies continue to source alternative capital sources and a SME Bond via peer-2-peer private finance is positioned to fill the gap.
- Use of funds for SME Bonds such as acquisition finance or refinancing of expiring debt. Well known brand name have the advantage when placing bonds backed by a balanced financing structure.
SME Bonds for acquisition
- Seller could offer SME Bonds as Vendor finance for franchises, management buyouts or acquisition. Suit most industries like logistics, energy, automotive and consumer sectors.
- SME Bonds are ideal as funding alternatives for companies too small to tap into the Corporate Bond market and want to invest in a self-sustaining cash-generating asset.
- The SME Bond rate is negotiated around the terms of the acquisition or buy-out and converted to equity or refinanced. Can use company assets as security.
SME Bond Pre-Application
Why use SME Bonds
- You have NO security to offer the bank, or cannot get approval
- No funds to acquire an established business
- You want a legal structure that is documented
- You want to negotiate flexible terms with the seller
- You need to establish trading and credit history for lending approval
- You want to use a short-term convertible bond to acquire a commercial asset
Fees and charges apply to issue and register your SME Bond Issue. Schedule your call here to learn more.
Call us 02 9006 1327
SME Bonds through Small-Scale Offer
Accessing alternative capital by issuing a SME Bond is a simple and legal method to raise money from the private debt or equity market through a small-scale offer. Accrutus Capital provides the legal framework and services for you, the Issuer of the Bonds, and assists you in the preparation of a compliant information memorandum about the business opportunity that investors will need to make an investment decision.
SME Bonds are promissory notes
A SME Bond (promissory note or note) is a written promise, legally enforceable; to pay on demand, or on one or more specified dates, a specified sum. The note sets forth the terms and conditions of the loan arrangement between the individual or company (issuing the SME Bond(s)) and the buyer or investor. The term ‘SME Bond’ is interchangeable with the terms ‘Promissory Note’ and ‘Note’. SME Bonds are issued under the Bills of Exchange Act 1909