Samantha Karp long and shor term financing

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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online