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Finance houses
Finance houses are very important sources of finance for companies and individuals. They advance credit, usually through factoring, a hire-purchase agreement or a lease, against the security of assets (‘asset finance’ or ‘asset-based finance’ (ABF)) such as cars or machinery. The asset might also be debts owed by customers. Strictly, these organisations are classified as ‘non-bank institutions’ but they provide debt finance and they are often owned by the major banks and so are included in this book. Typically they do not take deposits but obtain their funds from the money and bond markets. Some of the largest finance houses are owned by commercial organisations such as General Electric, JCB or Siemens rather than banks. ...
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