Financing For Financing And The Management Essays

1798 Words Apr 21st, 2016 8 Pages
Management is defined as the process of dealing with or controlling things. When a company manages its finances it controls how and how much to spend. A company in any stage of maturity may decide there is an opportunity to expand that requires more funds than it has on hand. In order to proceed the company will look at financing options. Company financing is a delicate orchestration of balance that aims to maximize growth without being dangerously risky. The goal is to have a thriving business and if the company decides to finance it must choose a source. This paper discusses options for financing and the management thereof. One way a business can acquire funding is through debt financing, or money provided by an external lender. Typically, debt financing is paid back over time in payments that include both principle and interest. The interest rate is determined by the form of lending and the businesses credit worthiness. For example, a bank will evaluate a company based on its historical financial statements and its business plan for the near future. The bank will note the company’s credit history, ability to repay, and any collateral they may provide for the loan. Collateral is any asset that is held to the loan; it can be seized by the lender upon loan repayment failure. Collateral offers security to the lender, and secured loans usually have a lower interest rate than unsecured loans. Companies can choose from a variety of debt financing. Financial institutions offer…

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