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. Economics

    What Is The Balance Of Payments?

  2. Bonds & Fixed Income

    Understanding Capital And Financial ...

  3. Fundamental Analysis

    What are some examples of how cash flows ...

  4. Fundamental Analysis

    What is the difference between cash ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center