Claim: 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.
Evidence: 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.