captive finance company

captive finance company definition - business

captive finance company

A subsidiary that raises capital and makes loans in order to benefit the parent company. For example, automobile manufacturers have long owned captive finance companies that loaned money to facilitate dealer inventories or customer purchases.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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