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. It can also be an expression used by specialists in the field when they look at how money is managed. A more general and accepted definition is the control of business plus public sector assets and money. People that look after or manage the arranging of finance are called finance managers.
This involves lending money to another company or individual, either from internal resources or externally. The term optimization is used to explain the procedure whereby finance is maximized by reducing costs and increasing the return. The lives of almost everyone on this planet revolve around finance and when poor management occurs, the effects are seen globally with reductions in production and sales which obviously feed world markets. The risks for a company are high if poor decisions are made and this is the reason finance managers do not last very long in this field.
A well know marketing and management guru Lee Iacocca said that finance managers always looked at the cost involved in a finance deal and not the future return. 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. Quite understandably, lenders are unhappy about this type of arrangement as they feel the money might be unsafe.
The aim is to educate businesses to act more responsibly when it comes to managing these issues and as a consequence their business. Fortunately, small businesses can always use the more approved methods of friends or relations to help provide finance. Finance managers can help improve their company's profits by using external sources which also lessens the risk on them at the same time. It is a well know fact that by the very virtue of the fact you require money, banks see you as a risk.
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