Depository institutions

Banks take on customer deposits, pay interest on them, and provide transaction services such as checking accounts. They then make loans to various borrowers with the funds, who pay interest on their loans, which forms the cash flows for the bank to pay interest on the deposits.

Payday lenders and factoring companies lend money to firms and individuals on the basis of their wages, accounts receivable, and other future cash flows.

Securities brokers provide loans to investors who purchase securities on margin. When this margin lending is to hedge funds and other institutions, the brokers are referred to as prime brokers.

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