Legal Definitions - small-loan company

A small-loan company is a type of finance company that deals directly with consumers in extending credit. They provide small loans to individuals who may not qualify for traditional bank loans. Small-loan companies may also purchase notes from other companies that make loans directly to borrowers.

• A company that provides short-term loans to individuals with poor credit scores.
• A company that purchases notes from a payday loan company.

These examples illustrate how small-loan companies provide credit to individuals who may not have access to traditional bank loans. They often charge higher interest rates to compensate for the increased risk of lending to individuals with poor credit scores.