Debenture loans definition. A debenture is a long-term financial.

Debenture loans definition. 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. It is a funding option for companies with solid finances that want to avoid issuing shares and diluting their equity. Aug 11, 2025 · In the United States, a debenture is a loan that is backed by the full faith and credit of the issuer. The company issuing the debenture agrees to repay the principal amount along with a fixed rate of interest at a specified future date known as the maturity date. com A debenture is a long-term debt instrument issued by a company to raise funds, usually with a fixed interest rate and a specific maturity date. Jun 28, 2023 · Debentures are essentially loan agreements, where the company issuing the debenture is the borrower and the investor buying the debenture is the lender. It represents an unsecured promise by the issuer to repay a specified sum on a future date, along with periodic interest payments. Jul 27, 2025 · While loans are typically one-to-one transactions with banks, debentures are publicly issued instruments and can be traded in the secondary market, which makes them more liquid but also more vulnerable to interest-rate and issuer risk. The legal term "debenture" originally referred to a document that either creates a debt or acknowledges it, but in some countries the term is now used interchangeably with bond, loan stock or note. See full list on investopedia. Both corporations and governments frequently issue them to secure capital. Debentures are backed only by the general creditworthiness and reputation of the issuer. Unlike secured loans, where borrowers pledge assets, debentures provide loan facilities May 11, 2024 · Topic: Understanding Debentures: Definition, Types, and Investment Potential What are Debentures? Types of Debentures: Convertible Debentures: Non-Convertible Debentures (NCDs): Secured Debentures: Unsecured Debentures: Redeemable Debentures: Perpetual Debentures: Investment Potential of Debentures: Fixed Income Stream: Diversification: Capital Preservation: Tailored Investment Options: Topic Start with our debenture loan and interest definition to learn everything you need to know about debentures. Nov 29, 2023 · A debenture is a loan certificate issued by the company to its holders. Instead of borrowing entire funds from an individual, a company can divide the funds into certain small denominations or parts (i. It is unsecured, meaning it is not backed by any collateral. Debentures can also be useful for companies that don’t want to tie up assets or who lack collateral for a traditional loan. What Is an SBA 504 Loan Debenture? An SBA 504 loan is a facility designed for small businesses by the Small Business Administration (SBA) and funded partly by a Certified Development Company (CDC) and private investors (through debentures). Aug 28, 2025 · A debenture loan is a specific type of debt instrument issued by companies. A debenture is a long-term financial A debenture is a type of long-term business debt not secured by any collateral. This means that, in the US at least, a debenture is a type of Unsecured Loan, with the high creditworthiness of the borrower prompting the lender to make the loan. Oct 7, 2024 · Debenture: Debenture holders receive regular interest payments, typically semi-annually or annually, but the principal is repaid in full at the end of the debenture’s term. , debentures). How does a debenture work? A debenture is a legal certificate that . Apr 7, 2024 · Published Apr 7, 2024 Definition of Debenture A debenture is a type of debt instrument that is not secured by physical assets or collateral. e. yo1w9y gb bnhaov bitg9l m0cw rlzjs 7wcl nnanpn omhz ouccr