Intercompany Financing

Intercompany financing refers to the process where different divisions or subsidiaries within the same larger corporation lend or borrow money from each other. This internal funding helps the company manage cash flow, fund projects, or optimize tax positions without relying on external lenders. Essentially, it’s a way for parts of the same organization to support each other financially, ensuring smooth operations and strategic flexibility across the overall enterprise. Proper management of these transactions is important for legal, tax, and financial reporting purposes.