Loans and finance are part of our daily lives since almost every one of us finds the need for a loan at one point or the other while finance is about every day life as long as we need to purchase items including food stuffs or basic house hold items on a regular basis. However when we look at finance loans and finance in its broader and business meaning, we must take note of the importance of these two aspects in our daily running of companies or businesses.
While the two terms may have a close link, the two have some difference in the sense that the loan is a method of financing while financing is the process of getting funds into the business through whatever means. Loans being one way of providing a company withy financing, we must look at the various types of loans that can be used in the financing of different types of companies. There are many reasons why a company or business may find itself in need of a loan, in spite of all the reasons, one thing is the same. All types of loans are given only on condition that the financing company is assured of recovering his money as agreed during the loaning process.
This is simply to mean that the loan applicant must be able to provide some kind of guarantee to the loaning company that he/she is likely to service hi/her loan as agreed. This is where the use of credit scores and records come in. In order to trust any one with your money it is only natural that you might want to know how such a person has been behaving whenever he/she has got the opportunity of benefiting from loans on previous occasions so that you can be able to gauge whether you can take the risk of lending such a person your money.
Since financing many projects in any investment may require financing, the finance personnel in charge is always charged with the responsibility of identifying the means to good loan facility to help the company in achieving its goals. Some of the methods will include loans on assets as security or on projected cash flow among other kinds of loans as long as the company is able to get back on track and to repay the loan in time. This makes the process of getting loans and finance rather intertwined since you can hardly talk about tone without really touching on the other in the process.