What Is the Role of Business Finance?

Commercial finance refers to the general term for a series of monetary commercial financial activities resulting from economic behaviors such as the rational allocation of resources and the rational flow of monetary funds under the guidance of national industrial policies, using market rules.

Commercial finance

Right!

Commercial finance refers to the general term for a series of monetary commercial financial activities resulting from economic behaviors such as the rational allocation of resources and the rational flow of monetary funds under the guidance of national industrial policies, using market rules.

The main characteristics of commercial finance:

(1) The subject of decision-making in commercial finance is that there are commercial banks in each country rather than national governments;

(2) maximize the profit of commercial finance;

(3) Commercial financial activities are realized through independent decision-making under the guidance of national industrial policies;

(4) Acting as a credit intermediary, and implementing paid borrowing is its basic principle;

(5) Commercial finance regards profitability, safety and liquidity as the main operating principles.

The difference between policy-based finance and commercial operation: Policy-based financial business refers to business that occurs in full accordance with the amount, purpose, and interest rate specified by the state. Such business cannot consider its own costs and economic benefits. The goal is the main purpose; and the commercial financial business refers to the business in which commercial financial institutions operate independently and in pursuit of maximizing profits in accordance with market rules and the "three natures" of credit funds.