Fundraising & Equity generatorSingapore
Convertible Loan Note (Singapore)
A convertible loan (convertible note) governed by Singapore law. The investor lends money that accrues interest and either converts into shares on a qualifying financing (at a cap and/or discount) or is repaid at maturity. Structured as a debt instrument of a Singapore Pte. Ltd.
What is a Convertible Loan Note?
A Convertible Loan Note (Singapore) is a convertible loan governed by Singapore law. The investor lends money that accrues interest and either converts into shares on a qualifying financing (at a cap and/or discount) or is repaid at maturity. It is structured as a debt instrument of a Singapore Pte. Ltd.
Singapore startups raising a bridge or seed round who prefer a debt instrument with a maturity date and interest, and investors who want downside protection (repayment) that a SAFE doesn't give.
Convertible Loan Note template, current for 2026
The drafting follows Singapore debt-instrument practice, with interest, maturity, conversion into allotted shares with ACRA return-of-allotment mechanics, Companies Act 1967 references, and S$ denomination, rather than a relabeled US note.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your Convertible Loan Note as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- The Company (the borrower issuing the Note) The Singapore private company limited by shares that is borrowing the money and will issue shares on conversion. Capture its full legal name, UEN/company number, and registered office.
- The Investor (the lender/noteholder) The person or entity lending the money. On conversion they receive shares; at maturity they may be repaid. Capture full legal name, ID/registration number, and address for notices.
- Company UEN / incorporation number The Company's Unique Entity Number as registered with ACRA. Identifies the borrower precisely in the recitals.
- Principal amount of the loan The amount the Investor is lending. This is the face value of the Note and the base on which interest accrues and conversion is calculated.
- Currency of the Note The currency in which the loan is advanced and repaid. Most Singapore notes are in SGD or USD.
- Specify the other currency State the three-letter currency code if not SGD or USD.
- Issue date of the Note The date the Note is issued and the agreement takes effect. Interest and the maturity period typically run from this date.
- Date the funds will be advanced (drawdown date) When the Investor actually transfers the principal to the Company. Often the same as the issue date; used to fix when the debt is outstanding.
- Maturity term (number of months from issue date) How long until the Note matures. If no qualifying financing occurs before this, the Note repays or converts at maturity. Typically 12-36 months.
- Interest rate (% per annum) The simple annual interest that accrues on the principal. Common range is 4-10%. Enter 0 for an interest-free note.
- How is accrued interest treated on conversion? On a conversion event, accrued interest can either be rolled into the amount that converts to shares, or paid out in cash. Rolling it in is the market norm.
- Simple or compound interest? Simple interest accrues only on the principal; compound interest also accrues on unpaid interest. Simple is more common for convertible notes.
- Qualifying Financing threshold (minimum new money raised to trigger auto-conversion) The size of an equity round that automatically converts the Note. A round below this threshold does not force conversion (though it may permit optional conversion).
- If an equity round completes below the Qualifying Financing threshold, may the Investor elect to convert on those terms? A sub-threshold round does not force conversion. Many notes still let the Investor convert into it voluntarily on the same terms, which keeps a smaller-than-expected round workable.
- Is there a valuation cap? A valuation cap sets a maximum company valuation for calculating the Investor's conversion price, protecting them if the company's valuation soars before the round.
- Valuation cap amount The maximum pre-money (or fully-diluted) valuation used to price the Investor's conversion shares. A lower cap gives the Investor more shares.
- Is the valuation cap pre-money or post-money? Sets the point at which the cap is measured, before or after the new financing money comes in. Post-money caps give investors a more predictable ownership percentage.
- Size of the employee share option pool reserved for cap purposes (% of fully-diluted capital) The unissued option pool the parties agree is reserved when the Cap Price is calculated. Fixing this makes the cap price deterministic. A typical reserved pool is 10-15%. Enter 0 if there is no reserved pool.
- For the Cap Price, is the option pool measured on the pre-financing pool or the increased post-financing pool? The single biggest driver of the cap price. Market standard is to measure the cap on the pre-financing fully-diluted capitalisation INCLUDING the unissued option pool then reserved, so the pool dilution is borne before the noteholder converts.
- Is there a conversion discount? A discount lets the Note convert at a percentage below the price paid by new investors in the qualifying round, rewarding the Investor for early risk.
- Discount rate (%) How much below the qualifying round's per-share price the Note converts. E.g. 20% means the Investor pays 80% of the round price. Typical range 10-25%.
- If both a cap and a discount apply, which price governs? When both mechanisms yield a price, choosing the lower (better) one for the Investor is standard; some notes let the Investor pick.
- Class of shares issued on a qualifying-financing conversion What shares the Note converts into on a qualifying round, usually the same class as the new round investors receive.
- If no qualifying financing occurs by maturity, what happens? At maturity with no round, the Note either repays in cash, converts to ordinary shares at a set valuation, or lets the Investor choose. Choose the default outcome.
- Valuation used for a maturity conversion (if applicable) If the Note converts at maturity absent a round, this valuation prices the shares. Often equals the valuation cap.
- Include a liquidity / exit event provision (sale or IPO before maturity)? Covers what happens if the Company is sold or lists before the Note converts or matures, typically a repayment premium or conversion right.
- Repayment multiple on a liquidity event On a sale/IPO the Investor commonly gets the greater of a multiple of principal (e.g. 1x-2x) or as-converted proceeds. Set the multiple.
- Include a most-favoured-nation (MFN) clause? An MFN lets this Investor adopt more favourable terms the Company later grants to other note holders in the same series/period.
- Grant the Investor a pro-rata participation right in the qualifying financing? Lets the Investor invest additional money in the qualifying round to maintain their ownership percentage.
- Is the Note secured or unsecured? Most early-stage convertible notes are unsecured. Security (a charge over assets) strengthens the Investor's position but is heavier to document and register with ACRA.
- Description of the security (if secured) Describe the collateral. A separate debenture/charge document and ACRA registration under the Companies Act will be needed.
- Ranking of the Note Where the Note sits in the repayment queue relative to other creditors. Convertible notes usually rank equally with unsecured creditors.
- May the Company prepay the Note before maturity? Says whether the Company can voluntarily repay early. Investors often restrict this (usually requiring consent) to preserve the upside of conversion.
- Prepayment premium (% of principal) Extra amount payable if the Company prepays, compensating the Investor for lost conversion upside.
- Include information rights for the Investor? Says whether the Company must provide the Investor with periodic financial statements and updates while the Note is outstanding.
- Which negative covenants apply while the Note is outstanding? (select all) Actions the Company must not take without the Investor's consent while the debt is live. These protect the Investor's economic position.
- Which events of default apply? (select all) Triggers that let the Investor demand immediate repayment. Standard set covers non-payment, insolvency, and breach.
- Cure period for a remediable default (days) How long the Company has to fix a curable breach before the Investor can accelerate. Commonly 10-30 days.
- Default interest rate (% per annum on overdue amounts) Higher rate applied to overdue sums after a default, over and above the ordinary interest. Must not be a penalty; keep it commercially reasonable.
- Include Investor accredited/sophisticated-investor representations? Under the Securities and Futures Act, offers to accredited or sophisticated investors are exempt from prospectus requirements. Reps confirm the Investor qualifies and acknowledge the resale restrictions in sections 275/276.
- Require conditions precedent before drawdown (certified board resolution, authority to allot, pre-emption waivers)? Good practice is to require, before the Investor advances funds, a certified board resolution approving the borrowing, the issue of the Note and the allotment of conversion shares, together with confirmation of constitutional authority to allot and a waiver of any pre-emption rights. That way the automatic conversion allotment cannot be frustrated.
- Who bears stamp duty and taxes on the Note and any conversion share transfer? Allocates responsibility for Singapore stamp duty (chargeable on certain instruments and share transfers) and related taxes. Each party bearing its own taxes with the Company paying instrument stamp duty is common.
- Governing law The law governing the Note. For a Singapore Pte Ltd this is almost always Singapore law.
- Specify governing law Only if not Singapore.
- Dispute resolution forum Whether disputes go to the Singapore courts or to arbitration (SIAC is the Singapore standard for cross-border deals).
- Is this Note part of a series of notes (multiple noteholders) with a majority-consent variation mechanism, or a standalone bilateral instrument? A series bridge with several noteholders needs a majority-noteholder consent mechanism so terms can be varied and MFN operated without every holder signing. A single-investor note is bilateral and amended by the two parties only.
- Majority-noteholder consent threshold (% by principal amount) The percentage of the outstanding note principal whose consent binds the whole series to a variation or waiver. Commonly a simple majority (over 50%) or two-thirds (66.7%).
- Company's email address for notices Where formal notices to the Company are delivered.
- Investor's email address for notices Where formal notices to the Investor are delivered.
- Name and title of the Company's authorised signatory The director or officer signing on behalf of the Company. A Singapore Pte Ltd typically signs by a director.
- Name and title of the Investor's signatory (if an entity) The individual signing for the Investor. Leave describing the individual themselves if the Investor is a natural person.
Frequently asked
About the Convertible Loan Note and how HDAi works.
What is a Convertible Loan Note (Singapore)? +
A Convertible Loan Note (Singapore) is a convertible loan governed by Singapore law. The investor lends money that accrues interest and either converts into shares on a qualifying financing (at a cap and/or discount) or is repaid at maturity. It is structured as a debt instrument of a Singapore Pte. Ltd. Singapore startups raising a bridge or seed round use it when they prefer a debt instrument with a maturity date and interest, and investors use it when they want downside protection (repayment) that a SAFE doesn't give.
Is HDAi's Convertible Loan Note (Singapore) legally binding? +
The Convertible Loan Note (Singapore) HDAi generates becomes binding once it is completed, reviewed, and properly signed. If you want it finished, a Hart David Carson attorney reviews the commercial terms from a US-law perspective after a planning call and, because the note is governed by Singapore law, coordinates with locally admitted counsel (quoted separately) before you sign.
Do I need a lawyer to use this Convertible Loan Note (Singapore)? +
You can generate and download the Convertible Loan Note (Singapore) in minutes, free of charge. A licensed Hart David Carson attorney can then review the conversion pricing, the maturity fallback, and the allotment conditions with you and coordinates with locally admitted Singapore counsel where the note needs it.
What makes this Convertible Loan Note (Singapore) current for 2026? +
The drafting follows Singapore debt-instrument practice, with interest, maturity, conversion into allotted shares with ACRA return-of-allotment mechanics, Companies Act 1967 references, and S$ denomination, rather than a relabeled US note.
How long does the Convertible Loan Note (Singapore) take? +
Estimated time about 26 min (51 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this Convertible Loan Note (Singapore) work in Singapore? +
Yes. This version is drafted for Singapore law and terminology. It is not a relabeled U.S. form. A licensed attorney coordinates with locally admitted counsel where required.
Other jurisdictions
The same document, drafted for another jurisdiction’s law.
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