Net Lending

AAA

DEFINITION of 'Net Lending'

The amount of extra funds that a sector has available to provide for either direct and indirect lending purposes to other similar counter-parts.

Net lending is used as a balancing item in the capital account. It is calculated as follows:

Net Lending



Where:
CT = Capital Transfers
NFS = Non-Financial Assets

INVESTOPEDIA EXPLAINS 'Net Lending'

The company must meet all other obligations before there is any consideration to lend out funds. The net lending of the total economy is the sum of the net lending or borrowing of the institutional sectors. It corresponds to the net resources that the total economy has available to supply to the rest of the world.

RELATED TERMS
  1. Small Business Lending Index - ...

    An index of business lending that is published by Thomson Reuters/Paynet. ...
  2. Economy

    The large set of inter-related economic production and consumption ...
  3. Capital Account

    A national account that shows the net change in asset ownership ...
  4. Loan

    The act of giving money, property or other material goods to ...
  5. Sector

    1. An area of the economy in which businesses share the same ...
  6. Basic Balance

    An economic measure for the balance of payments that combines ...
Related Articles
  1. What Is The Balance Of Payments?
    Economics

    What Is The Balance Of Payments?

  2. Understanding Capital And Financial ...
    Bonds & Fixed Income

    Understanding Capital And Financial ...

  3. Variable Costs
    Investing

    Variable Costs

  4. How to Use the Gearing Ratio
    Investing Basics

    How to Use the Gearing Ratio

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center