December 2012 – Retail bonds are debt investments where an investor will loan money to an entity, usually a company or government, that borrows the funds for a defined period of time, and they offer a specific interest rate. They are common for businesses that are struggling to stay afloat and they need some extra cash to keep them running.
An investor can offer up some cash as a type of loan that the company can use to get back on their feet and afford their finances. Of course, this loan is provided with an interest rate that they will have to repay on top of the loan when they begin to make payments toward it.
A retail bond can be profitable for investors that want to start helping small businesses recover their finances and get going in the industry once again. They became popular after the economy suffered in the recession and a lot of small businesses were out of money and had no way to start the business back up again. They have also helped provide the small businesses with cash so that they can begin investing in the company once again and make it profitable.
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