I’ve not drilled into specifics for dozens, but I’ve seen a company issue fixed term bonds and manage it all from group entities. Loan notes from entity A are administered by entity B who sells to clients and pays coupon/matured money. Entity A passes money to entity C to provide retail loans out at much higher rate than they are paying for coupon through entity B, with a proportion invested in the market, mainly safer govvies to ensure they can pay back end clients if some of the entity C loans default and unable to pass back enough cash to entity A.
Usually you’ll see those kind of companies try to move towards a banking licence so that they can move clients to a fixed term deposit/notice period account then lend out more and have a bankers exemption with regards to certain client money protections… Which I won’t go into.
Offering 5% in current climate… Time to raise an eye brow. If they are loaning out money, then would hope that they aren’t too loose with their assessments on potential loans