Definition, Example and Benefits of Finance Company

Definition, Example and Benefits of Finance Company

Finance company is increasing in its numbers in Indonesia with multiple relevant financing services for the current society’s needs. However, have you really understood the definition, example, and benefits of a finance company itself?

If not, this article can be your guide to learn more about the information that you need. This review contains the definition, example, and benefits of a finance company that will give you all the information that you need. With this, you can understand the purpose and services that you need from this particular company.

Definition of Finance Corporation

Presidential Regulation Number 9 Year 2009 had regulated the definition of a finance company clearly. A finance company is a business that performs business activities such as leasing, consumer financing, credit card business, and factoring.

From here on, we can see how the definition and benefits of a finance company make it different from banking institutions. Finance company focuses on certain needs funding services, infrastructure costs or production business needs, which roles that banking institutions do not do.

Example of a finance company

When we try to understand more about the definition, example, and benefits of a finance company, there are several functions of that company which you can see here.

1. Leasing

Leasing refers to the financing of capital goods procurement. Leasing enables companies to procure goods or certain materials that they need to support their business. The purpose of leasing is to increase the business’ productivity rate and profit rate in the future.

2. Venture capital

Venture capital-based finance company provides services in the form of equity capital or financing into a certain business in a considerable time span. Venture capital financing can take form in stocks, bonds, or similar financial equities. In this regard, a venture capitalist will perform equity capital inclusion for customers who require this service.

3. Factoring

Factoring is a business that offers financing in the form of billing, purchase, and accounts receivable management in a shorter time span. In this context, the accounts receivable comes from corporations that are involved in domestic or international transactions.

4. Credit business

Credit business is the most popular type of finance company. Befitting its name, credit card businesses can assist you to perform purchase transactions through their credit cards. You can do the payment by paying the price in installments. Several credit card businesses also provide cash loan withdrawals for customers who need them.

Benefits of a finance company

The existence of the finance company is beneficial for parties that need its services, whether these parties are corporations or individuals. Next up is several benefits of the finance company that you need to know.

1. Simplifying payment with installment payment

You can immediately receive your desired product or capital by paying them in installments. This form of payment enables you to balance your income with other necessity fulfillment at the same time.

2. Easy and speedy application process

To access the finance companies’ services, you are facilitated with an easy and speedy application process. The necessary requirements are very brief and easy to understand. The process is short as well, so you do not have to take a long time to receive your desired product or capital.

Read also: What Are Digital Application Forms and Its Benefits

3. Affordable loan interest

The amount of loan interest from finance companies are varied and affordable. The set amount of the interest still refers to the interest rate from Bank Indonesia (BI). This is the reason why the price that you must pay will not be burdensome to you.

4. Offering time flexibility

For every financing application, you will be given options of repayment time scheme that can be adjusted with your financial capability. The longer the time that you need for the repayment, the smaller the number of installments that you need to pay.

Just make it sure that you use the certified finance company with operational permits from Financial Services Authority (OJK) from the Indonesian government. Finance companies with legal permits will surely have reliable credibility in maintaining the security of your data, information, and transaction records due to their advanced system.

This is what we do in AdIns, where we offer a core system to perform data management for all finance companies. With several decades’ worth of experience in the world of multifinance, AdIns is trusted by many finance companies in guaranteeing their project implementations.

Author :

Ad-Ins

Published date :

11 April 2021