Foreign loans, typically to less developed countries, which have to be spent on goods and services from the lender. This is contrasted with an untied loan, which can be spent in any way. A tied loan may be of less value than an untied loan of equal size, as the tying restricts the choices open to the borrower, though where the borrower imports large quantities from the lender in any case, tying may be redundant. Tied loans reduce the chance that making them may cause balance-of-payments problems for the lender, so more loans may be available if they are made on a tied basis.