Since the emergence of mini-bonds, many companies are raising funds at a much higher rate than earlier. Mini-bonds are not new, but they have now become popular among emerging as well as established businesses.

A mini-bond is a kind of investment in which consumers capitalize on their favorite brands and in return enjoy higher annual interest rates. In such investments, the company or the brand raises capital without involving any bank, while the customer receives a higher rate of interest than that offered by a bank. That is why most customers are willingly investing in mini-bonds.

Chilango, which runs seven Mexican restaurants across London, has so far raised 144,500 pounds from around 33 investors. Similarly, British retailer John Lewis has raised $58 million through mini-bonds.

It is true that a mini-bond is more risky than a conventional bond. However, it involves less paperwork and brings better returns, which sways investors in its favor.

Chilango clubs its high 8% annual interest rate on its four-year mini-bond with free burrito vouchers. On the other hand, Hotel Chocolat is set to offer chocolates to investors, while Naked Wines offers 10% in wine and 5% in cash policy.

Market analysts predict that the trend of offering mini-bonds will intensify in the future.