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.
Poor finance management is caused when managers neglect the rules and a deterioration occurs affecting markets around the world. This is why people who act as finance managers only have this type of work for a relatively short period because the potential risk to companies is high and so are the stress levels as a consequence.
It has been said by a number of people that finance managers can often be 'time' short sighted as they rarely look a the long term 'bigger picture'. Finance managers are people who always like to see where they have been and do not look towards the future in the same way that a sales manager does. When arranging a business loan, many applicants forget that they are not to be used for personal matters; something that is ignored regularly. When money is lent under these circumstances, lenders feel quite aggrieved as they have lost control of where the money is being invested.
This may cause some concern amongst small business owners but they should train themselves to be more focused on their business which should in turn create a better frame of mind for the future. An important area for businesses to receive finance is their own bank or failing that good friends or even relatives. Obviously the more finance that is provided by outside sources the more it ignites the profitability of the lender. The famous comedian Bob Hope best summed up the subject when he once said; a bank is a place that will lend you money but only if you can prove that you don't need it.
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