Finance is a broad field that deals with money matters which are related to shareholders, companies, public, individuals or even government.
It is the process of providing loans to different types of companies that are involves in money making efforts. It mostly deals with small companies where business managed by individuals with not so skilled employs, insufficient technology and manufacture goods and services in small scale. Commercial finance deals with small scale companies.
- Commercial finance does not offer home loans, private loans, vehicle loan etc. Commercial Finance does provide any type of loan that is extended to a business.
- Commercial financing is generally offered by a Commercial bank or other money lender. Commercial financing offer loans that are either secured by business assets or alternatively they can be unsecured, in special cases where the lender urgently need cash for the business to repay the facility.
- Commercial Finance provides loans to company on the behalf of an interest return on its commercial loan. Commercial Finance does not seek any interest in profits and share of the company that an investor would expect. The owner of the company can get finance and also they can retain their ownership.
- In case of mortgaging company’s equipment against loan company still remain the legal owner of the equipment, unlike other financing firms.
It is the area of finance dealing with the funding of Corporations. Corporate finance deals with big companies that manufacture good and services in large scale. Corporate finance is all about helping corporate clients. It builds their business by providing funds and financial & strategic advice. These clients tend to be big corporate companies.
- It involves services of strategic advice on finance, value creation, financial analysis and strengthening the financial function.
- The basic concern of corporate finance is to maximize shareholder value through long and short term financial planning and execution of various strategies.
- Corporate Finance includes everything related to capital investment decisions to investment banking. It also involves all the long and short term decisions, which will benefit shareholders and also allowing the business itself to remain stable.
- It is objective oriented. It is used to achieve the objective of the company the main objectives are, to earn maximum profit.
Whether it is Commercial Finance or Corporate Finance both have their respective share in the growth of world economy as both are very integral part of World Economy.