Careers in Finance – An Overview

Finance is a very broad subject. Speaking in terms of employment doesn’t narrow the term much. There are a wide variety of careers and job positions available in the Finance field. Education requirements and salary expectations depend on the area of interest, as well as the geographical position.

Several careers opportunities are available in Finance. Banking is probably the more common position that comes to mind. Commercial Banking, Corporate Finance, Financial Planning, Insurance, Investment Banking, Money Management, and Careers in Real Estate are all related to the field of Finance. Studies done recently have shown that the need for people in the Finance field is growing. Incidentally, as long as there is money involved, there is a need for finance. Some characteristics of Finance professionals include; Strategic thinking, and the ability to comprehend complicated matters fairly quickly, a new, fresh perspective, and candor. If you are interested in a career in finance, you should also possess some leadership qualities, have a firm understanding of risk management, and have strong analytical and problem solving skills.

Keeping in mind that Finance is a global industry, a second or even third language would be a very helpful skill in this field. Education requirements vary, depending on the career path that you have chosen. An Associates Degree would be beneficial for a few minor career choices, but most companies require at least a Bachelor’s Degree for jobs such as accounting, investment banking, commercial banking, and so forth. You can opt to pursue your Master’s Degree, and expect to earn a much higher annual income. Income ranges with a Bachelor’s Degree start around $25,000 per year and top out at over $40,000. Starting salaries with a Master’s range from $30,000 to $80,000 annually. Incidentally, if you choose a Bachelor’s degree, your starting title would probably be “Junior Financial Analyst”, as with a Master’s it would be “Financial Analyst”. So, besides the annual income being higher, with a Master’s Degree, you can expect to have more responsibility and a much higher “clout” with companies than if you simply pursue a Bachelor’s Degree.

Whatever degree you decide to obtain, there will be specific courses of study that you must take. Actual course titles will, of course, vary by institution, but an example of your required courses would be: Developing Business Perspective, Management and Leadership, Fundamentals of Business, Marketing and Sales, Human Resource Management, Organization and Communication, Finance and Accounting, Financial Markets and Institutions, Investment and Portfolio Management, Business Ethics, Public and Nonprofit Finance, and Risk Management. Keep in mind that these courses are not the only ones that you will be required to take, depending on your choice of degree, and the institution that you attend.

The Government Finance Officers Association has information, news, and helpful links to help you whether you are in the Finance industry, or just thinking of entering finance. You can find lists of companies that are hiring, as well as their salary requirements and educational requirements. There are also links to local training events, as well as general news that affects the finance industry in the United States and Canada.

A look at some current job openings in the finance field, shows that the need for financial advisors is very much in demand. In California, an Assistant Chief Fiscal Officer, for a county government office, with only 1 year of experience, has a salary range of $81,765 to $99,424 annually. There are many opportunities in the government, if you have a finance degree, and you can expect the salary to be very competitive. Other, non-government companies, such as AIG, American Express, and local banks are a good place to get your start in the finance world. Also, private firms such as Deloitte & Touche Corporate Finance Canada, Inc., Chapman and Cutler, and William Blair & Company, all which serve the US and Canada, and other private firms hire periodically for new positions, and offer competitive salaries.

If you are inclined to seek your career in the finance industry, research companies well to find the best one for you. Educationally speaking, most colleges and institutions offer a wide range of courses, depending on the focal point of your finance choice. You would need to delve into the path of finance that you are planning to pursue, and with a little research and a good head for business, you could well be on your way to a very lucrative career in the ever-growing Finance World.

Sources of Business Finance

Sources of business finance can be studied under the following heads:

(1) Short Term Finance:

Short-term finance is needed to fulfill the current needs of business. The current needs may include payment of taxes, salaries or wages, repair expenses, payment to creditor etc. The need for short term finance arises because sales revenues and purchase payments are not perfectly same at all the time. Sometimes sales can be low as compared to purchases. Further sales may be on credit while purchases are on cash. So short term finance is needed to match these disequilibrium.

Sources of short term finance are as follows:

(i) Bank Overdraft: Bank overdraft is very widely used source of business finance. Under this client can draw certain sum of money over and above his original account balance. Thus it is easier for the businessman to meet short term unexpected expenses.

(ii) Bill Discounting: Bills of exchange can be discounted at the banks. This provides cash to the holder of the bill which can be used to finance immediate needs.

(iii) Advances from Customers: Advances are primarily demanded and received for the confirmation of orders However, these are also used as source of financing the operations necessary to execute the job order.

(iv) Installment Purchases: Purchasing on installment gives more time to make payments. The deferred payments are used as a source of financing small expenses which are to be paid immediately.

(v) Bill of Lading: Bill of lading and other export and import documents are used as a guarantee to take loan from banks and that loan amount can be used as finance for a short time period.

(vi) Financial Institutions: Different financial institutions also help businessmen to get out of financial difficulties by providing short-term loans. Certain co-operative societies can arrange short term financial assistance for businessmen.

(vii) Trade Credit: It is the usual practice of the businessmen to buy raw material, store and spares on credit. Such transactions result in increasing accounts payable of the business which are to be paid after a certain time period. Goods are sold on cash and payment is made after 30, 60, or 90 days. This allows some freedom to businessmen in meeting financial difficulties.

(2) Medium Term Finance:

This finance is required to meet the medium term (1-5 years) requirements of the business. Such finances are basically required for the balancing, modernization and replacement of machinery and plant. These are also needed for re-engineering of the organization. They aid the management in completing medium term capital projects within planned time. Following are the sources of medium term finance:

(i) Commercial Banks: Commercial banks are the major source of medium term finance. They provide loans for different time-period against appropriate securities. At the termination of terms the loan can be re-negotiated, if required.

(ii) Hire Purchase: Hire purchase means buying on installments. It allows the business house to have the required goods with payments to be made in future in agreed installment. Needless to say that some interest is always charged on outstanding amount.

(iii) Financial Institutions: Several financial institutions such as SME Bank, Industrial Development Bank, etc., also provide medium and long-term finances. Besides providing finance they also provide technical and managerial assistance on different matters.

(iv) Debentures and TFCs: Debentures and TFCs (Terms Finance Certificates) are also used as a source of medium term finances. Debentures is an acknowledgement of loan from the company. It can be of any duration as agreed among the parties. The debenture holder enjoys return at a fixed rate of interest. Under Islamic mode of financing debentures has been replaced by TFCs.

(v) Insurance Companies: Insurance companies have a large pool of funds contributed by their policy holders. Insurance companies grant loans and make investments out of this pool. Such loans are the source of medium term financing for various businesses.

(3) Long Term Finance:

Long term finances are those that are required on permanent basis or for more than five years tenure. They are basically desired to meet structural changes in business or for heavy modernization expenses. These are also needed to initiate a new business plan or for a long term developmental projects. Following are its sources:

(i) Equity Shares: This method is most widely used all over the world to raise long term finance. Equity shares are subscribed by public to generate the capital base of a large scale business. The equity share holders shares the profit and loss of the business. This method is safe and secured, in a sense that amount once received is only paid back at the time of wounding up of the company.

(ii) Retained Earnings: Retained earnings are the reserves which are generated from the excess profits. In times of need they can be used to finance the business project. This is also called ploughing back of profits.

(iii) Leasing: Leasing is also a source of long term finance. With the help of leasing, new equipment can be acquired without any heavy outflow of cash.

(iv) Financial Institutions: Different financial institutions such as former PICIC also provide long term loans to business houses.

(v) Debentures: Debentures and Participation Term Certificates are also used as a source of long term financing.

Conclusion:

These are various sources of finance. In fact there is no hard and fast rule to differentiate among short and medium term sources or medium and long term sources. A source for example commercial bank can provide both a short term or a long term loan according to the needs of client. However, all these sources are frequently used in the modern business world for raising finances.

Construction Equipment Financing Takes Planning

Establishing or expanding an existing construction business can be an overwhelming experience.
In deciding the proper direction you’ll need to plan out what type of equipment to purchase but more importantly how to pay for it. Are you able to pay cash or will construction equipment financing be necessary? Is it better to buy new equipment or will refurbished or used equipment be a better value.

Unable to pay cash is not unusual and often the need to seek out a construction equipment finance company is the best alternative. In researching equipment financing you’ll want to have a clear understanding of what your company needs in the way of equipment and how your cash flow will allow you to pay for it.

Determine The Type Of Equipment You Need

Your construction equipment finance company will need to know exactly what type of equipment you intend to purchase, as they will tailor the finance terms to match the need. Different types of equipment will have different types of financing. For example, if you plan to upgrade your computer system the finance company may offer shorter term financing as computer equipment becomes obsolete in a short amount of time. The purchase of a bulldozer or cement truck may have a much longer life span and be eligible for longer term financing.

Consider Used Or Refurbished Equipment

Once you decide how much equipment to buy, the brand you want or need, how much your budget can support, etc. you will then need to decide if buying new or used equipment is the best route to follow. Refurbished or used equipment may be an ideal solution, especially if the primary use is to be used as a back up to your existing construction equipment and not put into use on a daily basis. Not all used construction equipment will be reliable enough if you plan on making it your primary equipment. Just as you’d research the pros and cons of purchasing a used car you should perform diligent research on your proposed used equipment purchase.

Not All Financing Companies Are The Same

Now that you know what you want or need and have decided between refurbished or new it’s time to start researching financing companies. A good place to start is the bank that maintains your business checking account. Although they may not offer the most attractive financing options it may offer a good comparison to a company that is a construction equipment finance specialist.

Because it’s all that they do, an equipment financing company will be more knowledgeable than a commercial bank with regards to your specific business and equipment needs. Seek out a company that maintains its own underwriting department since these companies are more able to respond to your request for equipment financing quicker than if they had to send the application out of the department for review. The end result will be you have your financing quicker and delivery of your new equipment will not be delayed due to financing.

If you’re not in a position to purchase new or refurbished equipment another option often offered by equipment financing companies is equipment leasing. This is a great option for a seasonal business, someone just starting out or where tax advantages come into play. If you’re concerned about tying up liquid assets as you establish or expand your current construction equipment fleet, look to a construction equipment finance company. They have the experience and knowledge to help guide you in financial decisions that are right for you.