short term financing
Short-Term Financing
Short-term financing have some advantages that extend financial arrangements. Short-term funds interest rates are much lower than long-term funds. There are many different sources of short-term financing that companies use to better fit their business and budget. I will list and briefly explain the source and why a company may choose over the other.
1. Bad credit: offers secure and unsecure loans to a business.
2. Trade credit: a line of credit extended for 30 to 60 days to receive additional short-term financing.
3. Accruals: short-term liabilities that arise when received, but not yet paid for.
4. Private loans: a short-term unsecured loan obtained from a wealthy shareholder, major supplier or other part interested.
5. Commercial paper: consist of a promissory note with maturities periods ranging from 5 days to a year.
6. Account payable: allow company to buy raw materials, supplier goods for resale on credit. These are the main sources of short-term financing each one of them serves different purposes. Some company will choose either one to fit their company and their business budget, so they are able to maintain the company. Each source that is listed is all good ways to keep your business afloat. As a business owner you have to choose the best one you know will be able to supply your company. If you want your company to stay running for years you has to have reliable sources on your support team. Having a business running for years and years takes a smart and wise business owner to keep things going successfully and know what it takes to keep rising to the top.
Short-term financing have some advantages that extend financial arrangements. Short-term funds interest rates are much lower than long-term funds. There are many different sources of short-term financing that companies use to better fit their business and budget. I will list and briefly explain the source and why a company may choose over the other.
1. Bad credit: offers secure and unsecure loans to a business.
2. Trade credit: a line of credit extended for 30 to 60 days to receive additional short-term financing.
3. Accruals: short-term liabilities that arise when received, but not yet paid for.
4. Private loans: a short-term unsecured loan obtained from a wealthy shareholder, major supplier or other part interested.
5. Commercial paper: consist of a promissory note with maturities periods ranging from 5 days to a year.
6. Account payable: allow company to buy raw materials, supplier goods for resale on credit. These are the main sources of short-term financing each one of them serves different purposes. Some company will choose either one to fit their company and their business budget, so they are able to maintain the company. Each source that is listed is all good ways to keep your business afloat. As a business owner you have to choose the best one you know will be able to supply your company. If you want your company to stay running for years you has to have reliable sources on your support team. Having a business running for years and years takes a smart and wise business owner to keep things going successfully and know what it takes to keep rising to the top.