Any company definitely faces a problem of business funding. The main source of funding is traditionally a bank loan in Russia. Meanwhile, apart from traditional bank lending, an alternative method of raising borrowed funds for economic entities is a corporate bonds' issue. The fact that Russian companies become more interested in business funding by bonds' issue can be defined by several legal and institutional reasons. These days, market conditions enable all bond market participants to reduce

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... funding costs to a great extent. In addition to, now there is an unprecedented rise of a number of private investors in the bond market: the adoption of monetary policy in Russia partly has led to inflation expectations' growth which in turn has made private investors close bank deposits because of negative real return and break into the bond market searching for new ways and opportunities of investing. However, despite the fact that companies have a huge experience in borrowing by bank lending, the majority of Russian companies, in particular issuers from small and medium-sized businesses, face with financing through bonds' issue in the first time. In this article authors consider main external sources of companies' funding. The main aims which a company issuing bonds is able to fulfil were set by authors. There were analyzed major advantages and disadvantages of companies' funding by bonds' issue. Also, there were defined main criteria of the contemporary corporate bond market in Russia.