Your Ask Joey ™ Answer

Difference between a lender and creditor

The primary users of financial statements are lenders, creditors, and investors. Many students struggled to understand the fundamental difference between a lender and creditor.

A lender is typically a bank where their business is to supply money in exchange for interest. A lender may or may not have an active loan with a company, but if the company wants to receive a loan, then the lender would be a primary user. 

Creditors would be any institution, individual, or company that the company owes money to. So if a lender makes a loan to a company, then they would become a creditor. A creditor could also be suppliers or vendors that the company owes money to. If you gave the company a loan, you would be a creditor.

Ultimately, any entity or individual that is owed money by a company would be a creditor.


Back To All Questions

You might also be interested in...

  • Three Reasons to Become an Accountant

    If you’re someone who is intrigued by numbers, enjoys problem-solving and wants to help others, then accounting might be the perfect career for you. While some people may be put off by its unalluring reputation, accounting is an excellent career choice that has many benefits. In this article, we look at three of the reasons...

  • Qualified Retirement Planning: Tax Advantages & Disadvantages

    Home Advantages and Disadvantages of Tax-Free and Deferred-Tax Retirement Plans What are “qualified retirement plans” and how can they be effective for tax planning? Well, there are plenty of tax savings advantages to individuals contributing to tax-free retirement accounts, as well as tax-deferred retirement accounts. However, this doesn’t necessarily mean that there are no disadvantages...

  • CPA Evolution Survival Guide

    Download Your eBook by selecting the download icon in the top right-hand corner