4 Types of Finance With Examples

Introduction to Types of Finance

Finance is a field that mainly deals with financial activities and managing revenues in private and public sectors. Finance mainly manages money, assets, and investments.

Different types of finance are designed and developed for individuals, businesses, and the private and government sectors.

Companies mainly hire financial advisors and consultants for their business and organization’s strategic growth.

Financial services are used and utilized in banking, credit cards, investments, debts, and finance-related services.

Types of Finance
Types of Finance

4 Types of Finance With Examples

The four types of finance that are available are included below.
  1. Personal Finance.
  2. Corporate Finance.
  3. Public Finance.
  4. Behavioral Finance.

1. Personal Finance.

The term personal finance can be considered as managing personal and individual financial resources, including and managing saving, investments and retirement planning.

2. Corporate Finance.

Corporate finance mainly deals in the corporate or business sectors, where it helps manage financial and revenue activities through planning, capital budgeting, and mergers and acquisitions (M&A).

In corporate financing, the revenue and finance are managed to maintain cash flow and work with principal and capital finances.

3. Public Finance.

Public finance deals with the financial activities of government and the public sector. These include managing funds and finances, spending, debt, expenses, and taxes.

4. Behavioral Finance.

Behavioral finance explores how psychological factors and cognitive biases influence financial decisions and market outcomes.

What are the 10 Types of Sources of Finance?

10 types of sources of finance are included and mentioned below.
  1. Equity Financing.
  2. Debt Financing.
  3. Angel Investors.
  4. Venture Capital.
  5. Crowdfunding.
  6. Grants and Subsidies.
  7. Trade Credit.
  8. Lease Financing.
  9. Factoring.
  10. Personal Savings.

These are the few Types of Sources of Finance available for individuals, governments, and businesses.

Each set has its own advantages and disadvantages, depending on the specific financing.

What are the Four Basic of Finance?

Four basics of finance are included below.
  1. Investment.
  2. Risk Management.
  3. Time Value of Money.
  4. Liquidity and Cash Flow Management.
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What are the 9 Steps in Preparing Financial Statements?

  1. Gather Financial Data.
  2. Organize and Classify Transactions.
  3. Record Journal Entries.
  4. Adjusting Entries.
  5. Prepare Trial Balance.
  6. Adjust Trial Balance.
  7. Prepare Financial Statements.
  8. Analyze Financial Statements.
  9. Review and Finalize.

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Frequently Asked Questions [FAQs]

What are the 4 main functions of finance?

 Investment, dividend, financing, and liquidity decisions

What are the 3 major functions of finance?

1] Investment decisions.
2] Financial decisions.
3] Dividend decisions.

What are the 5 financial functions?

1] PV (Present Value).
2] FV (Future Value).
3] NPV (Net Present Value).
4] IRR (Internal Rate of Return).
5] PMT (Payment).

What are the six of the financial system?

Money, financial instruments, financial markets, financial institutions, regulatory agencies, and central banks.

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Above in the article, we have mentioned and discussed the four types of finance available in the market with definitions and examples.

Using these financial types and services, individuals and businesses can make appropriate and intelligent decisions to manage risk more effectively and earn money with calculated risk and modern financial services.

Financial goals can be achieved by budgeting, managing finance, personal and investing.

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