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FINANCE
•Finance is the basic requirement of any business.
•It is considered as the lifeblood of businesses.
•It is the amount of money, funds or capital required for
the smooth functioning of any business.
•It is required at every stage, from promotion to
liquidation.
•Adequate finance is required for orderly functioning of
a business.
•Promoters need to calculate financial needs through a
financial plan.
Page 2


FINANCE
•Finance is the basic requirement of any business.
•It is considered as the lifeblood of businesses.
•It is the amount of money, funds or capital required for
the smooth functioning of any business.
•It is required at every stage, from promotion to
liquidation.
•Adequate finance is required for orderly functioning of
a business.
•Promoters need to calculate financial needs through a
financial plan.
• Proper financial management is very important.
• Sources & application of funds.
• Thus, finance affects the profitability, growth and survival of 
a business.
• No finance, no business.
• Purpose of finance
Page 3


FINANCE
•Finance is the basic requirement of any business.
•It is considered as the lifeblood of businesses.
•It is the amount of money, funds or capital required for
the smooth functioning of any business.
•It is required at every stage, from promotion to
liquidation.
•Adequate finance is required for orderly functioning of
a business.
•Promoters need to calculate financial needs through a
financial plan.
• Proper financial management is very important.
• Sources & application of funds.
• Thus, finance affects the profitability, growth and survival of 
a business.
• No finance, no business.
• Purpose of finance
BUSINESS FINANCING
• Business finance is a process of raising, providing and
managing of all the money that is to be used in connection
with business activities.
• Business Finance is the finance required for conducting business
activities.
• Modern businesses require huge amount of fixed and working
capital for conducting business.
Page 4


FINANCE
•Finance is the basic requirement of any business.
•It is considered as the lifeblood of businesses.
•It is the amount of money, funds or capital required for
the smooth functioning of any business.
•It is required at every stage, from promotion to
liquidation.
•Adequate finance is required for orderly functioning of
a business.
•Promoters need to calculate financial needs through a
financial plan.
• Proper financial management is very important.
• Sources & application of funds.
• Thus, finance affects the profitability, growth and survival of 
a business.
• No finance, no business.
• Purpose of finance
BUSINESS FINANCING
• Business finance is a process of raising, providing and
managing of all the money that is to be used in connection
with business activities.
• Business Finance is the finance required for conducting business
activities.
• Modern businesses require huge amount of fixed and working
capital for conducting business.
Meaning 
Money required for carrying out business activities is 
called business Finance.
Definition
“Bu sin es s Finance can be broadly defined as the activity
concerned with planning, raising, controlling and
administering of funds used in the business. ”
Guthmann and Douglas
Page 5


FINANCE
•Finance is the basic requirement of any business.
•It is considered as the lifeblood of businesses.
•It is the amount of money, funds or capital required for
the smooth functioning of any business.
•It is required at every stage, from promotion to
liquidation.
•Adequate finance is required for orderly functioning of
a business.
•Promoters need to calculate financial needs through a
financial plan.
• Proper financial management is very important.
• Sources & application of funds.
• Thus, finance affects the profitability, growth and survival of 
a business.
• No finance, no business.
• Purpose of finance
BUSINESS FINANCING
• Business finance is a process of raising, providing and
managing of all the money that is to be used in connection
with business activities.
• Business Finance is the finance required for conducting business
activities.
• Modern businesses require huge amount of fixed and working
capital for conducting business.
Meaning 
Money required for carrying out business activities is 
called business Finance.
Definition
“Bu sin es s Finance can be broadly defined as the activity
concerned with planning, raising, controlling and
administering of funds used in the business. ”
Guthmann and Douglas
Features...
• Deals with financial aspect
• Concerned with estimation, collection and utilization of 
funds
• Needs proper planning & control
• Objective oriented activity
• Major aspect of business management
• Dynamic in nature 
• Business needs different types of finance.
• Collected from different sources
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FAQs on PPT - Sources of Business Finance - Business Studies (BST) Class 11 - Commerce

1. What are the different sources of business finance?
Ans. The different sources of business finance include equity financing, debt financing, trade credit, grants and subsidies, and crowdfunding. Equity financing involves raising funds by selling shares of ownership in the company, while debt financing involves borrowing money that needs to be repaid with interest. Trade credit refers to the practice of buying goods or services on credit from suppliers. Grants and subsidies are funds provided by governments or organizations for specific purposes, and crowdfunding involves raising money from a large number of people through online platforms.
2. How does equity financing work?
Ans. Equity financing works by selling shares of ownership in the company to investors in exchange for funds. This can be done through an initial public offering (IPO) where the company goes public and sells shares to the general public, or through private placements where shares are sold to a select group of investors. The investors become partial owners of the company and may receive dividends or capital gains if the company performs well. However, they also bear the risk of losing their investment if the company fails.
3. What is debt financing and how does it differ from equity financing?
Ans. Debt financing involves borrowing money from lenders or financial institutions that needs to be repaid with interest over a specified period of time. Unlike equity financing, where ownership is shared with investors, debt financing does not dilute the ownership of existing shareholders. Instead, the lenders have a claim on the company's assets and may have the right to seize them in case of default. Interest payments on the borrowed amount are considered as expenses and can be tax-deductible, unlike dividends paid to equity shareholders.
4. How can businesses obtain trade credit?
Ans. Businesses can obtain trade credit by establishing a good credit history with suppliers. This involves making consistent and timely payments for goods or services received on credit. Suppliers may offer trade credit based on the trust they have in the business's ability to repay. The terms of trade credit, such as the amount of credit offered and the repayment period, can vary depending on the supplier and the business's creditworthiness. Trade credit can be an effective way for businesses to manage cash flow and finance their operations.
5. What is crowdfunding and how does it work?
Ans. Crowdfunding is a method of raising funds from a large number of people, typically through online platforms. It involves presenting a business idea, project, or product to potential backers who can contribute small amounts of money towards the funding goal. Crowdfunding can take various forms, such as reward-based crowdfunding where backers receive non-financial rewards in return for their contribution, or equity-based crowdfunding where backers become shareholders of the company. This method allows businesses to access a wide pool of potential investors and supporters while showcasing their ideas or products.
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