1. Finance is the life blood without which business cannot exist.
2. It facilitates the smooth flow of goods and services from the point of production to the ultimate consumer and circulation of money, generation of revenue and the creation of profit. Finance or revenues generated through sales are used to create more goods which are again sold to bring in more revenue.
3. In the absence of finance no revenue can be generated.
4. Scale of finance needed by a business is directly proportional to the size and nature of the business.
5. Finance required by any business unit varies from time to time and is dependent on a number of factors.