Find out if making a capital increase through a convertible loan is enough to be able to apply for an Enisa.

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ENISA funding is very suitable for innovative startups and SMEs and is fully complementary to bank funding. They are among the first lines that entrepreneurs turn to to finance their company in the earliest stages and to be able to grow their project. Enisa's equity loans are ideal to accompany private investment rounds or capital increases carried out by partners, since Enisa works to equal or almost equal the amount of equity that the company has. It is highly advisable to have funding from Enisa so that entrepreneurs do not dilute their share of shares and control over the company so much.

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During the initial stages of a startup, it is common to resort to the issuance of convertible notes, also known as convertible loans, with the main objective of receiving a first injection of capital prior to carrying out a round of financing.

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Convertible notes or loans are a financing instrument through which a Startup receives capital immediately by those who intend to become future investors in the company.

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Thus, the startup receives this injection of capital and acquires a short-term debt agreement with the future investor who, in turn, receives preferred shares in the company.

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Due to the characteristics mentioned above, convertible notes, considered a hybrid between debt (short-term) and equity (long-term), are common in the early stages of a company, when it does not have enough resources to successfully close a round of financing and, in turn, it needs funding to undertake its development plans and increase the value of the company before closing the round.

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But can you apply for an Enisa through a convertible loan?

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The literal answer is NO, since ENISA will force you to convert it into capital. However, this does not mean that the application process cannot be started before carrying out such a conversion. If everything else is fine, approval will be conditional on the conversion of the loan into equity.

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Having said the above, it should be noted that the amount of the loan that ENISA can approve for a company cannot exceed the amount of the company's own funds at the time of approval. Therefore, before considering the possibility of applying for an ENISA by way of capitalizing a convertible loan, it must be ensured that the own funds after the conversion will be positive and greater than the amount of the requested loan.

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We help you get help from Enisa

If you want to assess whether the different Enisa lines can fit your company or project, we can advise you without obligation. At Intelectium, we work under a successful model in obtaining public aid. We help you to identify which grants are the best fit for you and to prepare all the necessary documentation to carry out the procedure correctly until you obtain funding. You can contact us through our form or by sending an email to comunicacion@intelectium.com