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Finance. The benefit of Finance. - it provides or raises the funds or capital for businesses. - A branch of economics. Science of funds management. - Includes saving and lending money. Credit policy. Trade Credit. - Advantages. - Disadvantages. - Credit forms.
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Finance The benefit of Finance • -it provides or raises the funds or capitalfor businesses. - A branch of economics. Science of funds management. - Includes saving and lending money.
Credit policy Trade Credit. - Advantages. - Disadvantages. - Credit forms.
What does trade credit mean? • Trade credit exists when one firm provides goods or services to a customer with an agreement to bill them later, ( without making immediate cash payment) or receive a shipment or service and it might give a discount for early payment. Why do companies offer trade credit? • Financing Growth. Example!
Advantages of trade credit. • People can buy goods and pay for them at a later date. • Increase the sales. • the business can focus on other areas such as sales, marketing and research. • Improve cash flow. Why do small business go for trade credit instead of borrowing from bank or financial institutions?
Disadvantages of trade credit. • If you do not pay them back on time you can build up a bad credit history. • Only companies with good credit history can be accepted the trade credit grant. • People can buy more than they can afford. • Risk of Bankruptcy. Different types of credit forms • Credit Cards. • Exchange of product.
