In one sentence
A lender holding loans on its own books rather than selling or securitizing them, bearing the credit risk directly.
The longer version
Balance-sheet lenders, banks, credit unions, life companies, and debt funds, keep the loans they make and live with the outcomes. That direct exposure tends to make their diligence and servicing rigorous.
Holding the risk means holding the file, for years, which is why balance-sheet lenders care so much about a durable, retrievable record.
Keep reading