Do you know how to manage your assets?

We use the term finance to explain the act of borrowing for loans or capital for a project. The subject it is actually a part of is economics which is also used to manage assets both monetary and fixed. A more general and accepted definition is the control of business plus public sector assets and money. Large companies with even larger portfolios will employ a finance manager to help control their assets.This type of management uses funds either from internal resources or external and allocates them to areas to maximize profit. The word Optimizing may sound strange but it refers to taking measures that minimize the cost of financing while simultaneously attempting to maximize the profits out of the employed finance. The fact is that it governs most of the worlds activities and poor finance management will immediately show up as conditions deteriorate in procurement, production and sales as it affects every sphere of business activities. That is why, a fund managers job is stressful as they must be careful where they allocate their funds and the potential risk involved thereafter.Finance managers can be very short sighted, only looking at the initial cost involved and not the future return capability of the project. Finance managers are the pessimists whereas sales managers are the optimists who look to the future and not to the past! Unfortunately when you are running a small business, the boundary lines between a personal loan and a business loan can be a little blurred and often the planned arrangement is not used as was not used for its original purpose. When money is lent under these circumstances, lenders feel quite aggrieved as they have lost control of where the money is being invested.By stopping business borrowing this way it is hoped they will start to see the importance of maintaining good practices which should help with investment later on. Fortunately, small businesses can always use the more approved methods of friends or relations to help provide finance. Lenders prefer to use money from elsewhere because it lowers their risk but still allows for a healthy profit to be received by the finance company. Banks have always been known as institutions that prefer to lend money to those that least need it which is why if you are already wealthy and require a loan it is often arranged at a preferential rate of interest.