Bond Financing

Bond financing is a method used by governments or corporations to raise money by issuing bonds. A bond is essentially a loan made by an investor to the issuer. When you buy a bond, you are lending your money, and in return, the issuer promises to pay you back the face value of the bond on a specified date, plus periodic interest payments. This process allows issuers to acquire funds for projects or expenses, while investors gain a predictable income stream. Bond financing is considered less risky than stocks, making it a popular investment choice.