Finance Business Resource: Short term Financing

Short term Financing

Short term Financing

Short term financing is the debt that matures in one year or less and used to fulfill seasonal and current assets needs.

Types/Sources/Instruments of short term financing
Short term finance can be collected from different sources. Those are given below-

Short Term Financing
1.   Spontaneous Financing
  1. Money Market
  1. Bank Loan
  1. Trade Credit
i.     Open Account
ii.   Notes Payable
iii. Trade Acceptance
  1. Advance Payment
  2. Accrued Expenses
a. Commercial Paper
b. Bankers Acceptance
a.    Unsecured Bank Loan
i.   Transaction Credit
ii. Line of Credit
iii.    Revolving Credit
iv.    Compensating Balance
b.   Secured Bank Loan
i.     Accounts Receivable
ii.   Inventories

Spontaneous Financing
Spontaneous Financing is the automatic sources of short term fund arising in the normal course of business operations.

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