A subordinated loan is a form of bond that, in the event of the issuer's bankruptcy, is repaid only after all other creditors have been satisfied. Because of the increased risk involved, the issuer usually offers a higher interest rate (coupon) than on ordinary bonds. This makes subordinated loans attractive to investors looking for higher yields, but who are also willing to take on more risk.

Subordinated loans are often used in acquisitions, such as management buyouts (MBOs), where additional financing is needed but available collateral is limited. The risk to the lender is greater, but so may the potential reward.

Example: In 2018, RR Mechatronics issued a subordinated loan of 3.5 million euros at 8% interest per year through the NPEX stock exchange to finance their growth.