Investment Type

Loan note investments are for a pre-defined period, which usually lasts between one and seven years. Interest is payable during that period. Some loan notes also offer bonus payments in order to encourage investors to leave their funds in place for the full term of the contract.

While with a loan note, tangible assets are not owned in the same way that buy to let investments (for example) are, there are still a major security in place, in the form of a Security Trustee. Therefore, should anything happen to the Loan Note issuer the Security Trustee has the power to seize all current and future assets, to ultimately liquidate, then distribute the funds to the noteholders.