These are corporate bonds, not on a stock exchange. They aren’t listed because when companies want to raise smaller amounts of money for a shorter term, the costs and the time it takes to list makes it prohibitive.

The FCA define crowd bonds as Non-Readily Realisable Securities (NRRS) or Speculative Illiquid Securities (SIS), depending on the business that is issuing the bond and whether there is any element of onward lending outside of the Group.

In both cases, the borrowers tend to be relatively mature businesses with tangible assets and, as such, typically have lower risk profiles than start-ups. As a result, they can attract cheaper funding to replace the more expensive finance taken earlier in the business lifecycle. The funds raised through our bonds are often used to refinance some of that more expensive funding.

Downing Bonds are often secured against a business’s tangible assets to help manage the risk for investors. Downing acts as a security trustee with a debenture over these assets, meaning that if the borrower defaults on the bond, Downing has the right to sell the assets to try and pay back some or all of your capital and interest.