A bond is a way for a company to raise money and works as a loan from an investor (the lender) to a company (the borrower). The borrower uses the money to fund its operations, and the lender earns interest on their investment. A bond is issued for a set period of time. When that time ends, the bond reaches its maturity, and the principal is returned to the investor. Bonds can also be purchased or sold at a discount before they reach their maturity.