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What is Professional Finance Company?
A professional finance company is a non-banking company that operates in the capital market. It carries out operations such as loans to individuals or companies. Although their process is similar to that of banks, they are not the same.
The interest rates charged by financial companies are higher than traditional banks. These companies grant a more excellent credit facility and assume a greater risk of default. That is why many of the clients who come to them do so because their bank does not grant them the loan they want, either because of their credit history or because of the risk of the operation.
Characteristics of a Financial Company
The characteristics that we can highlight of a financial company are the following:
- Its activity revolves around the capital market.
- They offer more fantastic credit facilities than banks.
- Obtaining a loan is usually less tedious than that of a financial institution.
- They request guarantees for the risk of non-payment.
- A large part of these types of companies is found within a matrix with other lines of business.
They work both with individuals and with other companies.
Types of Financial Company
We can group the different types of financial companies into three categories:
Individuals: Its activity focuses on granting credits to citizens. They give small credits to finance the purchase of a washing machine, the repair of a car, or the home reform.
Companies: They play a role similar to those that focus on individuals. In this way, they grant loans to companies to get ahead and meet their expenses.
Commercial: They are in charge of financing certain commercial operations of the companies. Purchases of raw materials or the acquisition of new machinery, among other options, can be covered.
Example of a Financial Company
With the advancement of technology and the development of new marketing models, many cases of financial companies can be found. Among them is a well-known French company, which makes small loans of up to €15,000.
This company offers practically immediate liquidity in exchange for an interest rate for the money borrowed. Another notable example, and increasingly fashionable, are vehicle rental companies. Most of the leading automobile brands include renting, leasing or financing new cars among their services.
In conclusion, a financial company is a non-banking company that carries out an activity that sometimes resembles a bank. For example, it offers credits to its clients in addition to accepting deposits and many other alternatives.
Financial Management far a Company
The financial management of a company consists of the work carried out by a professional with a career in Finance, carrying out tasks of planning, organization, and control of all the company’s accounting operations to use its resources efficiently.
The main functions of a company’s financial management are statements of cash flows (that is, cash inflows and outflows), balance sheets, profit and loss accounting, cost accounting, financing costs, and manoeuvre (capital available by the company), ratios, investment evaluation, etc. To expand knowledge, also know the functions of a financial director.
Objectives of Financial Management
The main financial management objectives are:
Obtaining profits over a long time
One of the main objectives of financial management is to optimize these profits as much as possible to continue investing.
Increase the market value
In other words, the financial management of a company seeks to increase the company’s capitalization, which has the advantage that the number of profits will multiply for the shareholder companies.
Maintain liquidity and solvency
All the objectives of financial management are related to each other, benefiting each other. The growth of the company’s profits is closely related to liquidity, that is, its ability to pay all of its debts, and solvency, that is, account management.
You already know what the financial management of a company consists of and the objectives of financial management. Now is your time to expand your knowledge by studying for a Master of Administration MBA with a concentration in Finance at one of the leading universities in online education, Tiffin University.
Study Tiffin Finance Career
The Master of Administration MBA with a concentration in Finance aims to provide participants with skills to improve their performance in the financial field, which can improve their business results. A career in Finance is composed of the following courses:
- International Financial Management
- Markets and Financial Institutions
- Investment Analysis
- Emerging Market Finance
- Global and Transnational Management
- Innovation in Decision Making
A career in Finance is taught 100% online and in Spanish, so neither language nor distance will impede starting your professional future.
Conclusion
A financing enterprise is equal to a person’s jurisprudence no bacteria that its principal activism consists of the embezzlement of credits and other capital market operations. Therefore, offer your services to businesses like particles to a select type of interface to the banks.
Also Read: How does Technology Influence the Stock Market?