Business and Personal Finance Dictionary

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• FINANCE COMPANY
  
  A non-bank financial institution. Finance companies in Australia date from 1925. Their numbers increased in the 1950s as they provided a source of consumer and commercial finance at a time when bank credit was tight and bank loans hard to get. Controls on banks led to high growth for finance companies in the 1960s and 1970s and fed speculation that, as banks were freed from these controls, finance companies would disappear. However, finance companies have survived, despite a freer banking sector, as commercial and consumer finance specialists. The larger finance companies raise funds from the public through debentures and note prospectuses, taking funds for terms between three months and five years.
  
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