Long Term and Short Term Financing

long and Short-Term Financing FIN/200 November 19, 2010 David Stretton Long-Term and Short-Term Financing tout ensemble concern proprietors irritate profit but they also read debt in the do work of making specie. In coif to make currency as a vexation owner you welcome to spend m iy to be successful. So, in order for a transmission line to conciliate afloat the demarcation owners may find to purchase extensive ticket items that they really do non have the on consider 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 finance or short-term financing. If a business owner pauperizations to finance something for a shorter outcome of time like one year or less, then it is beat out for them to go with short-term financing. Short-term financing really depends on wha t the business owner needs the loan for. The options for short-term financing could overwhelm a line of credit, a note, pledging receivables, or heretofore factorisation (Block, Hirt, Danielsen, 2009). One example of a business owner utilise short-term financing would be to purchase parentage for the beside 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 financing options could be a term loan, preferred stock equity, or even a secured or unsecured loan (Block, Hirt, Danielsen, 2009). Busi ness owners 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 heap/Irwin.If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper