How crowdfunding bonds work

Modified on Mon, 19 Sep 2022 at 04:10 PM

PeerPower crowdfunding bonds work much in the same way as corporate bonds. By buying crowdfunding bonds, you effectively lend money to the companies who issued the bonds (‘issuer’) in return for interest payments. 

With PeerPower crowdfunding bonds you get returns in the form of steady cash flows, usually every 1-3 months, and by the end of the bond term you will receive the fund repayment from the issuer. 

Crowdfunding bonds are different from corporate bonds sold in the public markets in the following ways: 

- They are not sold publicly, but only to registered investors through SEC-regulated online platforms such as PeerPower. 

- They are usually issued by small and medium-sized private businesses, rather than public companies or corporates. Therefore, crowdfunding bonds are a great way to support smaller businesses and also invest in fast-growing private businesses that are not in the stock market. 

- The duration is usually shorter so crowdfunding bonds tend to be more flexible. PeerPower crowdfunding bonds have durations ranging from 1 to 36 months.

- PeerPower don’t currently have a secondary market for exchanging of crowdfunding bonds.   

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