Answering the question, finance managers spend the majority of their time managing short-term financial needs.
Short time finance can be defined as finance needs for a short period. The short period is usually not up to a year. In many businesses, short term finance is also called working capital financing.
<h2>Further Explanation</h2>
Businesses need short time finance to take care of the uneven flow of cash, and for most firms, short term finance is used to finance all kinds of inventory and many more.
There are different types of short term financing and these include:
- Trade credit
- Short term loans
- Business line of credit
Trade credit: firms can get also receive credits from their suppliers or manufacturers. This type of credit is called trade or mercantile credit. The duration of the credit usually lasts between 30 and 90 days. A firm can access trade credit upon opening an account with their suppliers.
Short term loans: firms can also take advantage of short terms loans. This type of short term financing can be granted by banks or other financial institutions.
Business line of credit: it is regarded as the most suitable of all the types of short term financing. It is a type of short term financing in which a certain amount is approved by a financial institution. The firm will have to make a deposit anytime their customers make a payment to the firm.
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KEYWORDS:
- finance mangers
- short term needs
- majority
- company
- inventory
