Sources of Business Finance

SOURCES OF BUSINESS FINANCE

Introduction

The previous chapter highlighted the importance of insurance. The present chapter enlightens the students on the concept of Business Finance. Need for the Business Finance, sources of funds  and  the importance of savings and personal investment avenues, are briefly discussed in this chapter.

“Finance is the lifeblood of any business.” No business enterprise can function without finance. Business enterprises need finance for fixed and working capital requirement. Fixed capital requirements include purchase of plant, machinery, furniture, fixtures, vehicles, and so on, while working capital requirements include purchase of raw materials, payment of salary and wages, incurring operating expenses like telephone bills, carriage inward and outward, electricity charges, premium, stationery, etc. Owner or promoter has to estimate the business finance and accordingly look for various sources for financing the operations of the enterprises. The term sources of funds denote the various avenues of mobilization of funds for a concern. This chapter throws light on each source of capital.