What are short term sources of finance and long term sources of financing?

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farouk23 | College Teacher | (Level 1) Associate Educator

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Short term sources of finance are temporary sources of cash or funding that an organization can obtain to shore up their financial position or make necessary purchases. Examples of short term financing include:

  1. Short term loans
  2. Business credit lines
  3. Trade credit 

Long term sources of finance is used primarily to secure assets or execute projects and focuses on a more permanent outlook regarding what the funding will be used for. Examples of long term financing include:

  1. Equity financing
  2. Corporate bonds
  3. Capital notes 

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