Article Treasure Cove

Finance is an umbrella term for the movement of money from one company to another (or individual) to pay for goods or services and repaid with interest. This is part of the area of economics that focuses on the strategies and methods of looking after money and other financial assets. A more general and accepted definition is the control of business plus public sector assets and money. Large companies with even larger portfolios will employ a finance manager to help control their assets.

This type of management uses funds either from internal resources or external and allocates them to areas to maximize profit. The simple process of optimization is used to receive the most from these funds by reducing the cost of arranging the finance while at the same time ensuring returns are high. Poor finance is the cause of depressed markets caused when managers have not followed the optimization rule which leads to lower production and lower sales globally. That is why, a fund managers job is stressful as they must be careful where they allocate their funds and the potential risk involved thereafter.

It has been said by a number of people that finance managers can often be ‘time’ short sighted as they rarely look a the long term ‘bigger picture’. Finance managers are the pessimists whereas sales managers are the optimists who look to the future and not to the past! When arranging a business loan, many applicants forget that they are not to be used for personal matters; something that is ignored regularly. Lenders are not very happy about this type of situation because they like to know exactly what they are funding.

This may cause some concern amongst small business owners but they should train themselves to be more focused on their business which should in turn create a better frame of mind for the future. Fortunately, small businesses can always use the more approved methods of friends or relations to help provide finance. Of course lenders are out to make a profit and business loans can be expensive, a situation which is partly designed to increase the finance company’s return and to offset any potential problems later on. Bob Hope once said that you can only get a loan from a bank if you can prove to them you have absolutely no need for it; advice which could not be more true.

The aim is to educate businesses to act more responsibly when it comes to managing these issues and as a consequence their business. The problem is that many small businesses do not always source the best finance deal like trying their bank or alternatives like family or relations. Of course lenders are out to make a profit and business loans can be expensive, a situation which is partly designed to increase the finance company’s return and to offset any potential problems later on. The famous comedian Bob Hope best summed up the subject when he once said; a bank is a place that will lend you money but only if you can prove that you don’t need it.

Tags: Finance, finance advice, finance help, finance tips, financial freedom