What typically characterizes a finance company?

A finance company is typically characterized by its primary function of making consumer loans. These companies provide financing options to individuals or businesses, often targeting borrowers who may not qualify for traditional bank loans. They provide various types of loans, including personal loans, auto loans, and sometimes small business loans, and they may also focus on subprime lending, which caters to borrowers with lower credit ratings.

This characteristic distinguishes finance companies from the other types of financial institutions mentioned. For example, credit card companies primarily focus on credit card services rather than a broader range of loans, banks are comprehensive financial institutions that offer checking accounts and various banking services, and investment firms specialize in managing investment portfolios and retirement funds rather than directly providing loans. This specificity to consumer lending defines the essence of what finance companies are and what they typically do in the financial landscape.