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Finance Companies Finance companies are specialized lenders. Unlike banks, they do not take deposits, and they are not "full-service" financial institutions. Their funding is based on purchased money, which makes them more expensive than traditional banks. Many of these entities are owned by commercial banks. Finance companies are short-term lenders. They cannot issue or handle letters of credit, so their principal activity is making loans. There are very few finance companies that participate in international trade. |
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