ELI5: debenture
// explanation
What is a debenture?
A debenture is like an IOU that a big company gives you when it borrows money from you [3]. Instead of going to a bank, the company promises to pay you back with interest over several years [3].
Why do companies use them?
Companies use debentures because it's a way to borrow a lot of money without using a bank [3]. You get paid interest regularly, kind of like getting an allowance for lending them your money [3].
What does it feel like to own one?
Owning a debenture is like being a mini-lender—the company pays you money every few months for letting them use your money [3]. It's safer than owning company stock because you get paid back before shareholders do [3].
How do you get paid?
The company pays you a fixed amount of interest at set times, usually every 6 months or yearly, and then gives you all your money back when the debenture ends [3].
// sources
Apr 5, 2023 ... CDC is required to complete this form for each debenture to be sold in order to fund a 504 loan for a small business borrower.
The Lord Abbett Bond Debenture Fund seeks to deliver high current income and long-term growth of capital. View prospectus and more.
In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money at a fixed rate of interest.
The Lord Abbett Bond Debenture Fund seeks to deliver high current income and long-term growth of capital. View prospectus and more.
Apr 15, 2026 ... The interest rate for debentures issued under Section 221(g)(4) of the Act during the 6-month period beginning January 1, 2026, is 4.00 percent.
Video by WallStreetMojo
Video by Business Madhouse
Video by Investors Trading Academy
