Finance charge

A finance charge is the total fee incurred by a borrower to access and use debt. The charge compensates the lender for providing funds to a borrower. The total finance charge includes the following:

The amount of finance charges is closely related to the creditworthiness of the borrower. Thus, a stable business with predictable cash flows and a conservative financial structure will incur lower finance charges.

The government requires that finance charges be disclosed in lending documents.

Related Courses

Corporate Cash Management 
Corporate Finance 
Treasurer's Guidebook