Sources of Business Finance — Business Studies STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceBusiness StudiesSources of Business Finance3 Marks
Question
Why does business enterprise need finance?
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Answer
A business needs finance because:
Business is concerned with production and distribution of goods and services for the satisfaction of needs of society. There are four factors required for any production: land, labour, capital and entrepreneur. All these factors need to be paid for their services.
No business can be carried without availability of adequate funds.
As soon as a decision is taken to start a business, requirement of funds initiates.
Finance is called 'life blood of a business'.
It is very important to assess financial needs of the organization and the identification of various sources of finance.
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