Captive finance company,
Definition of Captive finance company:
The basic services of a captive finance company include basic card services like a store credit card and full-scale banking. This can offer the parent company a significant source of profit and limit the amount of risk exposure.
A captive finance company is a wholly-owned subsidiary that finances retail purchases from the parent firm. They range from mid-sized entities to giant firms depending on the size of the parent company.
Wholly owned subsidiary of a manufacturing or retailing firm that finances wholesale or retail purchases from the parent firm. For example, firms such Ford, General Electric, and Sears have their own finance companies which advance loans to buyers for purchasing the firms goods.
How to use Captive finance company in a sentence?
- Captive finance companies provide store credit cards for retailers and full-scale banking, including multi-year auto loans.
- Their purpose is to provide the parent company with a substantial source of profit and also limit the company's risk exposure. .
- A captive finance company is a wholly-owned subsidiary of an automaker or retailer that provides loans and other financial services to the customers of those companies.
Meaning of Captive finance company & Captive finance company Definition