Difference Between Borrow and Lend (With Table)

Study, languages, and subjects have always played an integral part in our lives and helped us grow to think analytically, politically, critically, and raise questions to show our society’s positions. 

From the study of rocks called geology, every subject exists today, a sub-division of geography, which is a division of social studies, to the analysis of space, dark matter, string theory, and even time travel that is a part of physics.  English that determines whether the person is qualified as a proficiency intermediate or an introductory speaker, is the universally accepted language.

Accounting or accounts is the soul of every business in the world. No business can survive without bookkeeping as it helps to assert profits, losses, expenditure, and flow of income. Moreover, it helps to keep accurate information on the assets and liabilities that the firm holds. The depreciation that is caused on the assets the salary that has to be paid to the employees. 

Moreover, bookkeeping results in investors’ final balance sheet as an instrument of whether the company is reliable and a place to invest, all of which are accounts or bookkeeping.

Borrow vs Lend

The difference between borrow and lend is that lending is an act of giving. For example, when the bank extends a loan towards us, the bank gives us money under some security that has to be repaid later. Borrowing is an act of taking something. For example, a company brought stationery stock on credit here; the company is borrowing goods where they will provide security like a bill of exchange which can be later discounted from the bank.

Borrow is when we take something; lend is something when we give something or extend something.

Comparison Table Between Borrow and Lend

Parameters of ComparisonBorrowLend
MeaningBorrowing means when a company takes loan from financial institutes is referred as borrowing and have to repay after a period of time.Lending is an act where the financial institute extends the loan to the individual and company for a particular time period.
ObjectivesBorrowing is not in terms of money it may be in terms of goods and commodityLending is also in terms of commodity like gold can be lend as a security
Grammar UsageBorrowing is a noun is English languageLending is termed as verb in English grammar as verbs are something that is use to indicate or happen.
MottoThe motto behind is, the person does not possess that particular and is borrowing by paying some premiumThe motto behind lending is to extend something you have in surplus and is ready to extend for some extra income.
PurposeBorrowing purpose is to use money and get an asset that can be used by the borrower and even generate income and repay.Lending purpose is to extend money to a person that is when re-payed with extra interest that becomes the income of lender.

What is Lending?

Lending is an act of giving or extending a particular or monetary term like money; lending is also termed as a verb as it specifies something action is taking place.

Lending is many times, meaning extending loans that are given to a third party. The party is supposed to repay the loan with a rate of interest that is considered an income for the lender.

Moreover, the lender is always considered supreme or has the upper hand in lending as the third party still has to pay or keep some collateral that is an assurance for the money and can be sold if the payee fails to deliver.

Lending has different terminologies and definitions. Lending is also known as a reverse repo in many accounting terms where the many big business houses borrow money for just a single day with specified collateral. The amount is enormous, and that can be used for significant dealings and investments.

What is Borrowing?

Borrowing is the act of getting and meaning getting something like a commodity like gold or money at credit, and assurance like collateral or a bill of exchange is provided. Borrowing often generates income just for the lender as they will be getting the principal sum with the decided rate of interest and security.

The borrower always has the lower hand as the lender has the security and can be sold if the borrower fails to repay the lender’s money. The borrowing is also considered a noun in English grammar as the word represents a name, place, or thing.

The borrowing is also termed as short selling or is an example of where one borrows shares of one company not purchased by the investor and is returned the borrower makes the same day and profits. Short selling also requires some collateral.

Main Differences Between Borrowing and Lending

  1. Borrowing is an act of getting something. For example, extending a bank loan is an act of lending and has to be repaid, whereas lending is an act of giving. For example, when a bank extends the loan, it is termed as lending.
  2. The purpose behind lending is to generate income as the lender will be interested in the books’ revenue. In contrast, borrowing is also used for a fruitful purpose like medical expense, home loan, or car loan repaid with interest.
  3. The fundamental purpose behind lending is to give money in exchange for security, called collateral. In contrast, the borrowing’s vital goal is getting cash and exchanging it again to buy the required assets or cover expenditure.
  4. The lender always has the upper hand as the lender can sell the collateral if the borrower fails to repay the loan. In contrast, the borrower doesn’t have any say in marketing the collateral as it was the security.
  5. The lending is to extend money many times; the lender can extend goods like a stock on credit for security like a bill of exchange. The borrower can also borrow commodities like gold or even an asset on lease to fulfil the purpose.

Conclusion 

All kinds of subjects today exist and are very important even the minute subject or language can be crucial to many people like studying rocks is also an essential part of issues’ functioning.

Accountancy is the soul of all kinds of business in the world. Without making books, the company cannot survive as it cannot interpret its losses or profits. Moreover, the books or the balance sheet is essential to many investors as they look forward to the position before buying any stakes.

References

https://www.jstor.org/stable/2329856