Are Mini-Bonds Right for Your Business?

Mini-Bonds are an alternative finance method that is typically used by small businesses. They were created to help the small businesses with financial backing. Some loans are government programs that try to stimulate the economy by helping the small business owners because they are considered higher risks than larger, established companies.


Typical rates are 1.5 to 2.5 percentage points below the current conventional loan rates. The rates are lower to help the business owner make money and helps with the payback terms. Lower rates can save a company thousands of dollars in interest and lower payments, over the life of the note.

Max Amounts To Borrow

The mini-bond is used for smaller projects, ranging between $500,000 to $2,000,000 dollars. The individual bonds will list the amounts allowed and may vary slightly, depending on each category. The mini bond was created to fund these smaller projects at lower rates to benefit smaller businesses.

Tax Benefits

The tax benefits of a mini-bond can be an immense benefit. Typically, the interest can be deducted and is used as a way to cut down the amount of tax that a business pays each year. The tax benefit can be used until the bond is paid in full.

What Mini-Bond Programs Are Available?

There are different mini-bond programs throughout the country. Some are offered locally for local businesses to profit from good rates, while other are offered through federal government programs. All mini-bond programs will have their own qualification guidelines. It is up to the individual lender to consider what the appropriate qualifications are for their bond.

Where Do I Find Available Mini-Bonds?

Contact your bank for a list of mini-bonds offered by them and by the federal government. If your bank is not currently offering any, then check with state and federal agencies for a current listing.

Who Benefits From The Bond?

The stock holders of your bond, the bank and you all benefit from a mini-bond, if it is paid back. In the stock market, investors think of mini-bonds as low investment risks with good return rates. The interest you pay will go to pay the bank back for the loan and the interest goes to the investors of the bond at the bond maturity date.

Mini-bonds can be a great way for businesses to get started on a project that might otherwise seem impossible. Learning all that you can about individual programs that are offered is the best way to decide if one is right for your business.