Document background
The Unsecured Convertible Promissory Note is commonly used in the UAE startup and growth company ecosystem as a bridge financing tool. It provides companies with immediate access to capital while offering investors the potential upside of equity participation. This document is particularly relevant when companies need interim financing before a larger funding round or when parties want to defer company valuation discussions. The note includes essential provisions required under UAE law, such as interest rate compliance, conversion mechanisms aligned with the UAE Commercial Companies Law, and appropriate enforcement provisions. It's typically used for amounts between AED 100,000 and AED 10 million, though larger amounts are possible. The document must carefully balance Sharia compliance considerations with conventional financing mechanisms, making it suitable for both traditional and Islamic finance structures in the UAE market.
