There is an interesting article in the 9\/18 edition of the Wall Street Journal about small and medium sized businesses issuing bonds in Germany. The bonds carry a coupon rate of about 7%, much higher than government debt, and apparently comprise 23% of the debt market in Germany. The companies are issuing the debt because German banks are decreasing their loans to German companies.<\/p>\n
We think this is a clever idea, and could be used in the United States. To be sure, the German companies were all around $175 milllion in sales,\u00a0 so they’re not exactly small by our definition.<\/p>\n
The companies issuing the bonds have all sorts of ways of promoting the bonds….bread wrappers, signs in their retail locations. No mention of web site promotions.<\/p>\n
Maybe kickstarter could get into the act!<\/p>\n
We don’t know of state regulations that would prohibit such issues. We think, if someone were to try it, it would be a good idea to write a prospectus describing the business and the chances of repayment.<\/p>\n","protected":false},"excerpt":{"rendered":"
Smaller German companies are allowed to issue bonds. Let’s try it more broadly! Continue reading