Meaning of Business Finance
Money required for carrying out business activities is called business finance. Almost all business activities require some finance. Business finance is a term that encompasses a wide range of activities and disciplines revolving around the management of money and other valuable assets. It is a term that encompasses a wide range of activities and disciplines revolving around the management of money and other valuable assets.
Finance is needed to establish a business, to run it, to modernize it, to expand, or diversify it. It is required for buying a whole variety of assets, they may be tangible like machinery, factories, buildings, offices; or intangible such as trademarks, patents technical expertise etc. Also finance is central to running day-to-day operations of business like buying supplies, paying bills, salaries, collecting cash from customers, etc. thus, needed at every stage in the life of a business entity. Every Business needs capital. Capital is required at the time of beginning of the business. It is also needed when the business is in operation. As an enterprise grows in size and expands, it’s needed finance to establish. The capital requirements for business are divided into two classes which are discussed as under:- Fixed Capital and Working Capital
Availability of adequate finance is, thus, very crucial for the survival and growth of a business.