Describe a short-term financing option and discuss the advantages and disadvantages. Is there a limit to the amount of a short-term bank loan?
Describe a short-term financing option and discuss the advantages and disadvantages. Is there a limit to the amount of a short-term bank loan?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 4LO
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Question
Describe a short-term financing option and discuss the advantages and disadvantages. Is there a limit to the amount of a short-term bank loan?
Expert Solution
Step 1
Short term financing:
Any loan that is obtained for a short period of time is Short Term financing.
As it is a loan it involves capital and interest.
The minimum period of short is generally 3 months to a max of 18 months. Any loan taken for more then 18 months is medium term or loan term loan.
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