Bond issue as an external source of funding the business activity

Abstract

In the area of external sources of funding the most important is bank loan. Bonds are not so popular source of capital. The aim of bond issue is financing planned budget deficit or necessity of innovative operation. In some cases bonds have better opportunities than bank loan. Bonds are less risky compared to other source of gaining capital and also give higher interest rates compared to short-term invest- ments. Moreover, bonds are much cheaper source of funding in comparison to bank loan. There are good prospects for future bonds market development because of its higher importance in the structure of external sources of funding.