Case Study: Seeing the Financial Side of Business
- List the various types of US financial institutions and the primary function of each.
Following are the details of different US financial institutions and their respective functions.
Commercial Banks: Commercial banks provide business and personal accounts to their customers. They also provide loans.
Saving and Loan Associates: they provide saving accounts and loans for long term mortgages etc.
Credit Unions: These financial institutions are the property of the people who have deposits in them.
- What services of each financial institution is Hill’s new company likely to need?
From different financial institutions, Hill’s would need different services in order to fulfill the financial needs of the company. Following are the details of the different needs according to the financial institution fulfilling these needs.
Saving Loan Associates: Hill’s new company would need saving accounts to save some money in and may be a mortgage facility.
Commercial Banks: Commercial banks can provide both short and long term financial help to Hill’s new company. They can also provide expert consultation to take the business in the forward direction.
Credit Unions: Hills would need short term financial investment.
- Which single financial institution is likely to be best able to meet Hills small company’s needs now? Why?
Hill’s new company needs a variety of financial facilities. It needs to find long and short term financing for its activities to run smoothly. It also needs to have certificate of deposit and other short term investments from the corporate sector and may be on personal level from investors who invest in small and medium enterprises. For all these mentioned needs, a commercial bank would be a suitable financial institution to meet Hill’s small company’s needs now. Commercial banks not only provide financial assistance, they also have experts who can help in regards to business consultations.