WHAT IS FINANCE?
Finance is a commercial
activity of providing funds and capital. The finance function
allocates resources, including the acquiring, investing, and
managing of resources.
advisor helps you to accomplish all your life's goals. But with
thousands of advisors out there, it is very difficult to choose the
best for you?
Poor management is cited most frequently as the reason
why businesses fail, inadequate or ill-timed financing is a close
second. Whether you're starting a business or expanding one,
sufficient in hand capital is essential. But
sufficient financing is not all; knowledge and planning are
also required to manage your money well.
TYPES OF FINANCING
There are two types of financing:
1) equity Financing
2) debt financing.
When looking for money, you must consider your company's
debt-to-equity ratio - that is the relation between the money you've
borrowed and the money you've invested in your business. The more
money is the easier it is
to attract financing.
For a high ratio of equity to debt, debt financing is a
better choice. But if your company has a
high proportion of debt to equity, it is advised to increase your ownership capital for
additional funds so That you won't be over-leveraged to the
point of jeopardizing your company's survival.