European financial institutions could not easily lend to the workers, rendering labor immobile because of capital market imperfections; so to address this imperfection, the Virginia Company would allow laborers to borrow against their future earnings for a fixed number of years.
The merchants agreed to finance the settlers' trip in return for repayment of their expenses plus interest out of the profits made. The Virginia Company refers collectively to two joint-stock companies chartered under James I on April 10, 1606 with the goal of establishing settlements on the coast of North America. 
