In order to address the particular needs of start-up firms, a new category of loan may be added, taking into account the challenges they face when raising capital in the form of convertible loans from abroad under current regulations. “In the context of convertible debt, a corporation could collect funds from international entities, meaning that the lender could grant the company an option to turn the loan into the borrowing company’s equity”, said SBP official. Under the Companies Act, 2017 (former Companies Ordinance 1984), the borrowing company shall be incorporated under the companies act unlisted corporation for no longer than seven years, so that such an organization is not established by breaking up or restoring a company already in operation. After its incorporation, a borrowing firm must have annual sales below Rs2 billion. As per recent audited financials, it should have capital (including retained earnings) below Rs300 million. The duration of such loans is between one to five years. Subject to the circumstance that its overall tenor may not extend five years, the loans can be rolled-over in any situation,
