Lending

Business, Legal & Accounting Glossary

Definition: Lending


Lending


Full Definition of Lending


Lending is a broad concept to define. In simple terms, lending is the act of giving out money with the intention that it will be returned after a fixed span of time. The act of lending is mainly carried out by several financial institutions. Banks were the most reliable source for lending money. Now, there are several other financial institutions, such as credit card companies and other consumer-finance establishments that have entered the business of lending.

Apart from the financial market, lending is also popular in the bond market. A person who buys a bond is termed as a lender. Buyer of a bond pays money at present time in exchange for assurances of future repayment. The person who sells a bond is known as a borrower. Bond seller receives money in exchange for assurances of future repayment. Thus, the act of selling a bond involves lending.

Asset-based Lending

Asset-based lending is practised by several financial services organizations. In asset-based lending, credit is lent on fixed assets, receivable, and inventory accounts. Asset-based lending can be done through purchase order financing, real estate financing, and leasing. Asset-based lending financial organizations aid domestic and overseas commercial banks, autonomous finance companies of any size, floor plan financing institutes, factoring groups and financing subordinates of key industrial companies.

Predatory Lending

Predatory lending is generally referred to as an unprincipled lending practice that is targeted to exploit the low-income group of people or other vulnerable people. In the act of predatory lending, high-cost loans are granted to the borrowers based on their level of assets holdings and not on their ability to repay. This lending practise also involves refinancing of loan by the borrower again and again and in lieu of which the lender charges high points and fees. Another type of predatory lending happens when lenders use forge documents to alter the true cost of the loan.


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https://payrollheaven.com/define/lending/
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Lending. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
March 28, 2024 https://payrollheaven.com/define/lending/.
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Lending. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/lending/ (accessed: March 28, 2024).
American Psychological Association (APA):
Lending. PayrollHeaven.com. Retrieved March 28, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/lending/

Definition Sources


Definitions for Lending are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 27th March, 2020 | 0 Views.