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Convertible loan notes are investment instruments that blend debt and equity. They are not loans for purchasing goods like a convertible car but are used by investors to fund companies. Investing can be done through equity, which involves owning part of a business and carries higher risk with potential for significant rewards, or through debt, which entails lending money to a company with guaranteed repayment but limited upside. Convertible loan notes allow investors to lend money with the option of converting that debt into equity later. This can be appealing if the business shows promise for future success.