Why do some enterprises raise funds by issuing bonds instead of directly lending to banks?

Corporate bonds are called direct financing and loans are called indirect financing; These are two different financing methods. The former has low cost and the latter has high cost.

Corporate bonds are rated according to the risk of debt, which leads to different interest rates. The interest rate is determined by the investors who invest in bonds, that is, by the market. Not linked to the bank loan interest rate. In addition, the cost of bank loans is high, because banks tend to have high-yield and low-risk projects, which need mortgage or guarantee, and also need to arrange real-time evaluation and monitoring by loan officers; The interest rate is completely determined by the bank, and the loan interest rate will be adjusted according to the situation. For some enterprises, these costs are too high; Where bonds are issued, they shall be directly submitted to relevant business departments for approval and issued directly. Interest will be paid according to coupon rate, so you don't have to worry about the bank repaying the loan at any time.

So, is it better to issue bonds or bank loans?

References:

Please indicate the source of the old uncle's works in cornfield.