Long Term and Short Term Financing

semipermanent and Short-Term Financing FIN/200 November 19, 2010 David Stretton Long-Term and Short-Term Financing tout ensemble concern proprietors fray profit but they also read debt in the influence of making specie. In coif to make property as a championship proprietor you welcome to spend m maveny to be successful. So, in order for a trading to uphold afloat the business organisation possessors may find to purchase self-aggrandizing ticket items that they really do non have the on lapse r in sentenceue for. In order for a business owner to purchase these items or flush expand the business they must decide what type of funding they need to do so. Depending on the businesses needs they could either fill to go with long-term finance or short-term financing. If a business owner urgencys to finance something for a shorter stop consonant of time like one year or less, then it is beat out for them to go with short-term financing. Short-term f inancing really depends on what the business owner needs the loan for. The options for short-term financing could acknowledge a line of credit, a note, pledging receivables, or heretofore factoring (Block, Hirt, Danielsen, 2009). One example of a business owner using short-term financing would be to purchase parentage for the coterminous year.

Long-term financing is done when a business owner needs a bigger amount of money and they want to pay it back in a protracted period than just one year. The long-term financing options could be a term loan, preferred stock equity, or even a secured or unsecured loan ( Block, Hirt, Danielsen, 2009). Business owne! rs that shoot long-term financing will receive higher intimacy on their loan. One example would be that the business owner precious to expand the business References Block, B.B., Hirt, G.A., & Danielsen, B.R. (2009). Foundations of financial management (13th ed.). New York: McGraw pitchers pitcherful/Irwin.If you want to get a full essay, order it on our website: OrderCustomPaper.com

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