Under our wings

Everyone uses finance at some point in their lives when they need capital supplied by another. The term can also refer to another branch of the subject dealing with its management. If you prefer, it can also be a general term which encompasses the entire subject of managing and supplying money in the business and private sector. 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 way this works is that managers work to keep the cost of their borrowing low whilst passing this cost on with a an additional percentage to the client enabling a profit to be made. Bad debts are poor finance management where rules have not been followed; the result of this is depressed markets, low production and a cash crisis; however this can be helped with the use of  inventory asset management . The finance manager's job is to maximize profits whilst keeping the risk to a minimum so you can understand why there is a high level of stress associated with this work.The well known management expert Lee Iacocca said of finance managers that they only see the cost of the investment and not the possible return. Unlike the sales managers who would like to invest in the future by product development, finance managers are rather skeptical of financing a project whose benefits lie in the future; even though their management governs future outcomes too. 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.By stopping business borrowing this way it is hoped they will start to see the importance of maintaining good practices which should help with investment later on. Small businesses can be very flexible, however, and call upon friends, other businesses, family members, even their own bank for finance. Lenders prefer to use money from elsewhere because it lowers their risk but still allows for a healthy profit to be received by the finance company. 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.