Business finance refers to the requirements of funds by a business to carry out its various activities. It is regarded as the life blood of any business because no business can function without an adequate amount of funds to establish and run its operations.

Businesses need funds for three main purposes. Firstly, funds are required for purchasing fixed assets such as plant, machinery, and furniture, which is known as fixed capital requirement. Secondly, funds are needed for running day-to-day operations like purchasing raw materials and paying salaries to employees, termed as working capital requirement. Finally, funds are essential for undertaking growth and expansion plans in the business organisation.