Finance companies are subjected to regulations set by the state in which they operate. They're subjected to lending from the available source of capital by which they provide loans and generate profits through the interest paid by borrowers. These institutions lend monies to customers as others give out financial borrowings to large and small businesses with an attraction of a specific rate of interest repayable on principle amount. Finance companies do not take in deposits from the civic and are never subject to strict banking regulations; therefore, they are not categorized as banks. These institutions source finances for lending to consumers and business owners from the interest they charge to borrowed monies.