Financial Resource Management Essay Example | Topics and Well Written Essays - 750 words

Financial Re denotation Management - Essay ExampleWith the aid of trade goods are made available to consumers at the time of their need. It removes the hindrance of persons by bringing together producers and consumers who are widely scattered.Financing is of two types, faithfulness financial support and debt financing. When you are in need of money or looking for capital, companys debt-to-equity-ratio should be considered. It is the relations between the Dollars or Euros that an entrepreneur has borrowed and Dollars or Euros invested in the business. The more than the investment by the owners the more they attract the financing.When the equity to debt ratio of the quick is high then debt financing should be taken. If the proportion of the debt to equity ratio of the firm is high then it is advised that the owners should increase their equity investment, that way they cannot jeopardize firms survival.Limited equity financing is used by most of the small or growth stage businesses . Whereas in debt financing, funds pour in from different quarters like from friends, relatives, etcetera Venture capitalists are the most common source of equity funding. Venture capitalists may be institutional take chances takers, financial institutions, wealthy persons, etc. and most of them specialize in industries. Venture capitalists are risk takers and show interest only in three to five year old companies that result in more than average profits. These venture capitalists are called as investment gurus whose interest lies in those companies that have major regional and national concerns. Debt FinancingCommercial finance companies, financial institutions, banks, savings and loans, Lloyds Bank small business, etc. are some of the sources for debt financing. Because of their positive impact on the whole economy local and state government encourage the growth of the small companies. In debt financing additional funds comes from friends, family, relatives, and industry colleag ues, etc when capital investment is smaller.Generally banks formed as a major source for loans for the establishment of small businesses. Banks dont offer spacious term loans to small firms instead they grant short term loans for machinery and