What are some short term sources of financing used by companies to raise funds?

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farouk23 eNotes educator| Certified Educator

Short term financing is used by companies and organizations to shore up their financial position on a temporary basis. It could be used to meet an immediate cash flow issue or for operational purchases that are critically needed. The characteristics of all short term financing options are that they are mostly used or should be mostly used only on a temporary basis. Some of the short-term financing options available are: 

  1. Business lines of credit
  2. Business credit/charge card
  3. Short term loan
  4. Trade credit
  5. Debt factoring and invoice discounting
  6. Business overdrafts