The advent of min-bonds in the UK has been an interesting financial phenomena and nice option for investment crowdfunding platforms. Investing in mini-bonds allows individuals to receive an annual return with a lower level of risk. Crowdcube has been the leader in the mini-bond space with high profile, consumer face issues that typically deliver not just interest but perks. Mini-bonds are unsecured debt that may allow businesses to raise debt funding quickly online. Crowdcube has announced today that early issuers Chilango and River Cottage have made first interest payments in the amount of £93,000.
Chilango, a Mexican styled UK restaurant chain, launched its ‘Burrito Bond’ in August of 2014 offering 8% gross annual interest. Over 700 individuals invested £2 million in the popular restaurant. A total of £65,120 was paid (net of tax) in the first of the semi-annual interest payments last month, at an average of £92 per person. The mini-bond term is four years but investors will have an option to roll over with same terms going forward.
River Cottage, a well known restaurant and food brand, has paid £27,818 in interest to 285 investors who funded a £1 million capital raise. Investors also receive an ongoing 10% discount at its three locations.
“Crowdcube brought bonds online, making them easier for investors to access and breaking down the barriers to entry for established but fast-growth businesses like Pocket that want their customers to be part of their future success,” said Crowdcube co-founder Luke Lang. “We’ve helped growing businesses raise more than £7.7 million through our mini-bonds over the last 7 months and we’re pretty pleased with the pace of new bond products being launched with more in the pipeline.”
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