Debt to Equity Conversion

Our Debt for Equities Program allows public companies to satisfy trade payables, debts and other liabilities in exchange for unregistered or registered common stock. Lending Hub is the industry leader in this innovative financing structure, which can substantially reduce the transactional costs and time necessary to complete a financing.

We will pay a company’s creditors in cash, in exchange for an assignment of their accounts, and then agree with the Company to satisfy its payables for common stock.

Issuers can use a Debt to Equity exchange to clean up and strengthen their balance sheet, by converting short and long-term debt to equity. This allows companies to reallocate their resources away from paying existing obligations and toward funding future growth of their business.

Interest will no longer be payable, or accrue, on the debt. By contrast, there is no ongoing cost of equity for the company.

The rights of enforcement, and other lender protections usually found in finance agreements, will fall away. This will be helpful as a lender will no longer be able to enforce these rights and potentially push the company into a liquidation process.

By converting existing debt to equity, the company may free itself up to take on more borrowing, on different (and maybe more beneficial) terms. This will increase the cash available to the company.

Debt to Equity transactions can be used to pay off outstanding accounts payable owed to service providers such as lawyers, accountants, landlords and investor relations firms as well as products suppliers, manufacturers, equipment dealers and other key vendors. You can also repay promissory notes, debentures and outstanding loan balances.

If a company is cash constrained and having difficulty managing cash flow, the debt to Equity program can renew, reinvigorate and strengthen current vendor relationships. Lending Hub works with the owners of the company for guidance on payment terms and priority, which creditors to approach first, and which are best suited for the program.

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