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Why do businesses need to raise finance?

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Answer #1

because they have to make a profit :p

Answer #2

In order to buy assets to pay for facilities such as rent, invest in other properties and business in order to make money to buy their stock which they need to sell. And generally they need finance to run the business, maybe as well to advertise, to buy more stock in order attract more customers. There are various reasons.

Answer #3

It’s always better to use other peoples’ money… when you consider what it might take to say, open a restaurant or even a small cafe. The furniture alone, tables and chairs, could cost well into the hundreds of thousands. Example, one table and four chairs could easily cost $2,500. So the idea is to borrow money, and build your business. While you’re paying back the loan, you’re making a profit, e.g. enough to pay the loan and the employees and enough left to live on and hopefully more. Of course it doesn’t always work that way.

Answer #4

Businesses need finance to pay for the bills for their various resources as mentioned above. Sometimes, businesses also need extra money for investments and buying/selling share, i.e. for future growth.

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