26 Jan Understanding Worthy Bonds
Did you know that since 2015, the use of fintech tools among digitally active consumers has surged from 16% to 33%?
We at Worthy understand the shift towards transparency, flexibility, and accessibility, and have engineered our product around these needs. So what exactly IS a Worthy bond?
We have worked for the past year to create a way for everyday, “retail” investors to have access to the types of higher returns that were previously reserved for only the wealthy. We did this by creating a simple financial product – a bond – much like other companies and governments do when they need to raise money for themselves. But in our case, we are not using the money from bond sales to fund ourselves, but to fund asset-backed (= secured) loans to growing American businesses.
How do we do this? When you buy any type of bond, you are simply loaning the money you pay for the bond to the bond issuer – and they are obligated to pay it back with interest. (Same thing happens when you deposit money into your bank savings account – the bank loans it out too, but they only share the smallest sliver of interest with you). At Worthy, we take the proceeds from our bond sales and lend these funds out to businesses to buy inventory. The inventory is the collateral behind the loan – which means in the unlikely event the borrower should not be able to pay back the loan, the inventory can be sold to recoup the money lent. As these businesses repay their loans, you get to share in a much larger percentage of the interest the borrowers pay.
Unlike many bond sellers, we don’t charge any fees or commissions as we want you to make as much money as possible with Worthy! You make 5% annual interest and business owners across America get the funding they need to stock their shelves! Finally, a way to combine an attractive financial return with a positive social impact.