Financing
Improved Explanation of Financing
Financing is the process of obtaining funds to support business ventures, personal purchases, or investments. It involves borrowing money or obtaining equity from investors to bridge the gap between current resources and desired expenditures. Financial institutions, such as banks, play a crucial role in facilitating this process by providing capital to individuals and businesses
- Time Value of Money (TVM): Financing leverages the concept of TVM, recognizing that money available today is worth more than the same amount in the future due to its earning potential.
- Market for Money: The demand for funds from borrowers and the supply of funds from lenders create a market for capital.
- Risk and Return: Financing involves assessing the risk associated with a project or investment and determining the appropriate return required to compensate for that risk.
- Bringing new look to your business!
- Financial Instruments: Various financial instruments, such as loans, bonds, and equity, are used to facilitate financing.