A loan that increases spending power, but is used in business that does not directly increase the economy's output, such as a leveraged buyout loan.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A loan that does not increase an economy's total output, but may increase the economy's total spending power. One of the most common examples of a nonproductive loan is leveraged buyout. Nonproductive loans are made by commercial banks.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved