Finance your project with loans from investors you already know.
Each investor signs a participatory loan with your company and it is recorded in a digital registry. It is a contract between your company and each investor, prepared and reviewed by your law firm. As it is not a securities issuance, neither a securities registry entity (ERIR) nor an investment services company (ESI) is involved. It works for an S.L.
What it is
A participatory loan is a contract between each investor and your company. Your investors become lenders to your company, without buying shares or bonds.
Interest has a variable part, which depends on how your company's activity evolves. You can also agree on a fixed part.
In the order of payment it ranks behind ordinary creditors. For capital reduction and liquidation purposes, it counts as net equity.
Each contract is recorded in a digital registry that serves as evidence. That record does not replace the contract and cannot be transferred separately from it.
Order of payment
- 1Ordinary creditorsPaid first
- 2Participatory loanPaid after ordinary creditors
- 3ShareholdersReceive what remains
- Counts as net equity for capital reduction and liquidation purposes
Interest
An example, in numbers.
Ten investors you know lend you 20,000 € each: 200,000 € to your company for three years. You agree on a fixed interest rate of 2 % and a variable share of 10 % of your net profit.
In a year with no profit, you only pay the fixed part. In a year when things go well, your investors earn more. At maturity, you repay the loan or, if you agreed, you capitalize it and your investors become shareholders.
- Today200,000 €. Ten investors lend it to you
- Year 14,000 €. No profit: only the fixed part
- Year 219,000 €. 4,000 fixed and 15,000 from a profit of 150,000
- Year 334,000 €. 4,000 fixed and 30,000 from a profit of 300,000
- At maturity200,000 €. You repay it, or you capitalize it if you agreed
Example figures, excluding taxes: ten investors of 20,000 € each, a fixed 2 % and 10 % of net profit. Each investor receives their tenth share of each payment.
When it fits and when it doesn't.
It fits if
- Your company is an S.L. or an S.A. and you do not want to issue securities. With an S.L., you do not need to convert it.
- Your investors are people you already know and whom you invite yourself.
- You accept linking part of the interest to how your company performs.
It does not fit if
- You want to raise funds from the general public. For that, you need an authorized platform or a securities issuance, such as bonds and debentures.
- You want your investors to be able to sell easily. They can only assign their loan with an assignment contract, and HokenFi does not offer a market.
- You want to be able to repay it early when it suits you. You can only do so if you increase your equity by the same amount.
- You expect someone to find investors for you. HokenFi does not find lenders or publish your project.
What you decide.
Your law firm puts it in writing in the contract.
- 01The amount each investor lends you
- 02The term
- 03The variable interest criterion, such as net profit or turnover
- 04The fixed interest, if any
- 05The penalty if you repay early
- 06Whether the loan can convert into shares at maturity
- 07Who you invite
How it's done with HokenFi.
You prepare the contract with your law firm and each investor signs theirs with your company. This path does not go through the ERIR or the ESI.
- 01
Your contract
Prepare the loan contract, with its fixed and variable interest and whether it can convert
- 02
Your register
Activate your plan · Invite your investors · Record each loan in your register of lenders
- 03
Sign with your investors
Verify their identity and prevent money laundering, before signing · Sign the loan with an electronic signature · Disburse to your company, through an authorized payment provider
- 04
During the loan
You settle the interest from the dashboard. At maturity, you repay the principal or capitalize it with a capital increase, if you agreed. HokenFi does not receive or hold funds in custody.
Your contract
| Milestone | Who |
|---|---|
| Prepare the loan contract, with its fixed and variable interest and whether it can convert | Your law firm |
Your register
| Milestone | Who |
|---|---|
| Activate your plan | You |
| Invite your investors | You |
| Record each loan in your register of lenders | HokenFi |
Sign with your investors
| Milestone | Who |
|---|---|
| Verify their identity and prevent money laundering, before signing | Each investor |
| Sign the loan with an electronic signature | Each investor and your company |
| Disburse to your company, through an authorized payment provider | Each investor |
What beginners usually ask.
On which network is each contract recorded?
On the one you choose: Ethereum, Polygon, another network compatible with the Ethereum Virtual Machine (EVM) or Solana. Since it does not go through the ERIR, it does not depend on the networks it accepts.
What law regulates it?
Article 20 of Real Decreto-ley 7/1996. It serves to finance you with investors you know. To raise funds from the general public, an authorized platform or a securities issuance is required.
Why are neither ERIR nor ESI involved?
Because you do not issue securities. The ERIR keeps the registry of negotiable securities and the ESI validates securities offerings when the law requires it. Here each investor signs a contract with your company.
What is the representative token?
The digital representation of each contract. It serves as a record and proof, but it does not replace the contract and cannot be transferred separately from it.
Who puts up the money?
The investors you know and whom you invite. HokenFi does not seek lenders or publish your project, and the loan must not be offered to the general public.
Can an investor assign their loan?
Yes, with an assignment contract that is communicated to your company and after verifying the new lender. HokenFi records the change, but does not seek buyers or offer a market.
Can I repay it early?
Yes, but only if you offset the repayment with an increase in your equity for the same amount, and it does not come from revaluing assets. The contract may set a penalty.
What if it converts into shares?
If the contract provides for it, at maturity it can be capitalized through a capital increase approved by your shareholders' meeting. The investor becomes a shareholder, and their shares are not tokenized.
What does HokenFi do?
It provides the software for the contract, the signature, investor verification, the lender registry, and settlements. It does not lend, does not receive funds, and is not part of the contract.
How much does it cost?
You pay a one-time access fee of 249 € when creating the account. The plan, from 249 € per month, is the same as in issuances. Your law firm's fees are separate and you see them in their proposal before signing. There are no ERIR or ESI fees. Prices exclude VAT.
A project and a group of investors? Sign the first loan.
Create the account and prepare the contract with your law firm.
