UK Accounting Glossary
A finance company is an organization that originates loans for both businesses and consumers. Much like a bank, a typical finance company acts as a lending entity by extending credit. However, the main difference between a bank and a finance company is that, unlike a bank, a finance company does not accept deposits from the public. Instead, a finance company may draw funding from banks and various other money market resources. A finance company may extend credit to individuals for various consumer purchases, as well as to corporations for commercial use. A finance company may also specialize in providing financing for a variety of instalment plan sales. A finance company may also be affiliated with a manufacturing firm or a holding company.
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This glossary post was last updated: 9th February 2020.