1- Nature and significance of business finance
Business finance can be used at different stages of the development of a business. First of all one must use finance to raise the sum of money required to start a business i.e. the initial capital. The amount of funds required depends upon the nature and size of the business. Finance is also required to operate the business. To meet the day-to-day needs of the business, its managers cannot do without finance. They will as well need finance for the modernization of the business.
Finance is very important for the survival of a business. Indeed all businesses share the need of finance to acquire fixed assets including machinery, furniture and find short terms working capital to run their activities. Availability of finance is thus essential to the daily activities as well as for investment in durable assets. Yet, the importance of the finance does not end with the launching of the business. Additional investments are needed to proceed to expansion, modernization and increasing competition. Adoption of new methods of production or distribution or plant and machinery to be modernized, or new products in the market require heavy expenses. Finance is needed at every moment in the life of a business. It must be available at the proper time and sufficient. Finance plays such a vital role in modern enterprise that it’s often said to be the