Definition

The practice of letting someone borrow money they probably can't pay back, then being shocked when they don't pay it back. Banks do this professionally and call it 'credit risk management'; friends do it and lose both the money and the friendship.

Example Usage

Our lending standards have loosened so much that we're approving applications from customers with negative net worth.

Source: Banking and finance terminology

Related Terms

Beginner

working capital

Current assets minus current liabilities—the money available to fund daily operations without selling the furniture. Positive working capital means you can pay your bills; negative means start selling that furniture.

💰 Finance / Accounting
Intermediate

fiduciary duty

The legal obligation to act in someone else's best financial interest, putting their needs above your own. It's the difference between a financial advisor who works for you and one who's basically a commissioned salesperson.

💰 Finance / Accounting
Beginner

loans

Money you borrow today that magically transforms into significantly more money you owe tomorrow, thanks to the mystical powers of interest rates. Think of it as financial time travel where your future self picks up the tab, plus fees. The cornerstone of modern capitalism and the reason your banker drives a nicer car than you do.

💰 Finance / Accounting
Intermediate

forensic accounting

The use of accounting skills to investigate fraud, embezzlement, and financial crimes—essentially detective work for people who find excitement in spreadsheet anomalies. It's where accounting meets CSI, minus the dramatic lighting.

💰 Finance / Accounting
Beginner

basis of accounting

The fundamental method used to determine when transactions are recorded—either when cash moves (cash basis) or when obligations occur (accrual basis). Like choosing whether to count calories when you eat or when you order.

💰 Finance / Accounting
Beginner

insurance

The adult version of 'just in case,' where you pay someone monthly to maybe help you later when disaster strikes. It's essentially a bet where you're hoping to lose: you give them money, and if nothing bad happens, they keep it and everyone's happy. The entire industry runs on actuarial tables, fine print, and the mathematical certainty that most people will pay more than they'll ever claim.

💰 Finance / Accounting

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See “lending” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

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