Chapter 13, Problem 3LO

To determine

The different types of finance companies and their features

Context Introduction:

A company that lends capital to the productive sector of individuals and businesses is termed as a finance company. The finance companies usually obtain their financing from the money market sources like the banks, institutions, other finance companies, etc. Therefore, although the finance companies work as a credit agency or a lending entity, it is not similar to a bank as it does not obtain its deposits from the public. A finance company may provide credit to individuals and businesses for both individual and commercial purposes.