Meaning of Business Finance

Money required for carrying out business activities is called business finance. Virtually every business activity — from the very first day of operation — needs money behind it.

Finance is needed to establish a business, to run it day to day, to modernise it with new technology, and to expand or diversify into new products and markets.

It goes toward acquiring a wide range of assets:

• Tangible assets — machinery, factories, buildings, and offices.
• Intangible assets — trademarks, patents, and technical expertise.

Beyond acquiring assets, finance is also central to the day-to-day operations of a business — buying raw material, paying bills and salaries, and collecting cash from customers. In short, finance is required at every single stage in the life of a business entity. …