FIN200 Week 5 CheckPoint Long-Term and Short-Term Financing

FIN200 Week 5 CheckPoint Long-Term and Short-Term Financing...

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Write a 200- to 300-word paper comparing long- and short-term financing. Describe situations in which each type of financing would be used. Word count: 296 Both new and established businesses will find it necessary to incur debts during the course of business operations. Financing may be sought for a multitude of reasons – like smoothing cash flow, purchasing equipment, or expanding operations. The choice between short- and long-term financing options should be determined based on each business’ individual needs. To make that determination, businesses also need to understand when each type of financing is appropriate. For financing needs over a period of a year or less, sort term financing can be used to inject capital into businesses. Short term financing options include short-term loans, letters of credit, promissory notes, overdrafting, and inventory loans. These options are often used by businesses to cover day-to-day costs like supplies, inventory orders, and wages. Due to the
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