Capital required to conduct the business in audit to achieve different object called business finance.
Needed of Finance
Growth and Development
EmergenciesFinance needed to cover the unexpected risk and emergencies. So More funds needed to meet the labor strike, demand for higher wages bonus and new taxes etc.
Kinds of Business Finance
Finance needed for development purpose like the purchase of land and stock capital of goods construction of building as well as infra structure. Funds also needed for emergencies; social security’s and welfare of the labor force etc. finance are of three kinds.
Long Term Finance
The duration of such finance is between three to ten years. So loans taken for the purchase of land and equipment, construction of building and infra structure and the replacement of old machinery with latest one.
Medium Term Finance
The duration of finance is between one to three years. Such finance needed to meet the fundamental needs of the firm as well as for operation
Short Term Finance
It ranges is between 30 days to one year. So loans taken for operation and maintenance like the purchase of raw material, payment of tax, wages and rent and all other emergencies.