What is corporate finance?

Corporate finance plays a vital role in every business. Irrespective of the size or type of business operations, every company seeks to streamline its corporate financing arm for optimal wealth distribution and return generation. Considering these factors, this extends to an array of financing and investment decisions that cover four primary aspects:

  • Planning finances
  • Raising funds
  • Investing
  • Monitoring

Corporate finance refers to activities and transactions related to raising capital to create, develop and acquire a business. It is directly related to company decisions that have a financial or monetary impact. It can be considered as a liaison between the capital market and the organisation.

Types of Corporate Finance

Corporate financing includes raising funds, either by way of equity or debt.

  1. Owner’s funds – Equity or ownership finance is strictly limited to raising capital for the owners of a company.
  2. Debt funds – Also known as external finance, debt funds come in multiple options like debentures, corporate loans, private financing, etc. While debentures can be issued to the general public for refinancing, institutional lenders are the primary source of private finance.

Availing of corporate finance in India is made more accessible by lenders like Bajaj Finserv, offering a range of loans to help address an enterprise’s need for capital. It includes unsecured business loans, SME/MSME loans, plant and machinery loans, etc. These are available with flexible tenors to allow business owners to tailor repayment to suit their cash flow.