Finance is the general term applied to the commercial service of providing funds and capital. As a branch of a broader subject ‘economics’, it can also be viewed as a method of managing assets.

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.

The responsibility these managers have is to improve company profits by using their own resources by providing funds to another which then must be paid back. The whole basis of optimization is to enable the maximum return from your finance while ensuring the cost to arrange it stays at a minimum.

Poor finance is the cause of depressed markets caused when managers have not followed the optimization rule which leads to lower production and lower sales globally. The risks for a company are high if poor decisions are made and this is the reason finance managers do not last very long in this field.

Finance managers can be very short sighted, only looking at the initial cost involved and not the future return capability of the project. These managers are the opposite of sales managers who are forward, investment thinking individuals; whereas a finance manager will not recognize the fact that investment requires an approach that lies in seeing into the future to look for returns.

Many small business owners forget that the business loan they have arranged is not for personal use; a distinction which gets blurred regularly. Most lenders will cancel the loan if they feel they have been deceived this way because they are unsure what the money is to be invested in.

The aim is to educate businesses to act more responsibly when it comes to managing these issues and as a consequence their business. Small businesses are not however, restricted to using external finance companies because other sources do exist including their bank, friends and other types of private lender.

However, finance managers are in the position of making money for their company so out sourcing their lending can help increase their profits. A famous quote about banks goes something like; banks are only interested and willing to lend money to those individuals that least need or want it.