Samantha Karp long and shor term financing

Samantha Karp long and shor term financing - using...

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Samantha Karp Long-Term and Short-Term Financing Long-Term financing is obtained when a business wants capital provided for over 1 year. This capital is commonly used to not only expand or purchase equipment for the company but also to stay out of debt. Sources for long-term financing are debt, derivatives, and equity. An example of a long-term finance would be a 30 year mortgage or a 5 year loan. Depending on the company type the kind of long-term financing will vary. Corporations can use long-term financing for both debt and equity needs where businesses that are not corporations should be
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Unformatted text preview: using long-term financing for debt purposes. Short-Term financing is exact opposite of Long-Term in the essence it will be provided for 1 year or less. Financing short-term is used usually for daily needs of a business, such as; to pay wages, to order inventory, and/or for supplies. Companies that experience seasonal peaks are well known to borrow short-term financing. Sources a company would seek short-term financing would be: overdrafts, bills of exchange, inventory loan, letters of credit, and factoring....
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