The document discusses the differences between long-term and short-term financing. Long-term financing is used to fund projects and investments that last over one year, such as establishment, expansion, innovation and R&D. It provides more stability but higher interest rates than short-term financing, which is used for working capital and operating expenses lasting less than one year. Some benefits of long-term financing include flexibility, while higher interest costs and rates are drawbacks compared to short-term financing.

2.  Long-term financing is a mode of financing that
is offered for more than one year.It is required
by an organization during the
establishment,expansion,technological
innovation,and research and development.
 In addition long term financing is required to
finance long term investment projects.Long
term funds are paid back during the lifetime of
an organization.

3.  Short term financing means business
financing from short term sources which are
for less than one year.
 The same helps the company generate cash
for working of the business and for operating
expenses,which is usually for a smaller
amount
 It involves developing money by online
loans,lines of credit and invoice financing

4.  Stability-Long-term financing provides
businesses with a more stable debt
management instrument than short-term loans.
 Flexibility-There is a wide variety of long term
debt financing options available to
borrowers,such as mortgages,leases,reverse
mortgages and loan refinancing which can be
fine-tuned to meet the borrower’s needs.This
allows more flexibility and control overspending.

5.  Higher Interest Rates-The interest rates
available for a long term financing
agreement are usually higher than the rates
available for short term
 Greater Interest Cost-The higher rates alone
for a long term loan mean that one will pay
more over the life of the loan than one would
for a short term

6.  Interest paid back by value will be lower in
short-term loans than long-term loans
 The approval and disbursement process is
faster. As the rate of return increases and
yield per unit time is higher due to interest
rate approval.
 You Don’t Need Good Credit

7.  When capital is invested in long-term loans, the amount
returned to the bank as interest is higher between the
successive processing of the capital. But if the same
capital is invested in short-term loans, then the amount
returned as interest is lower. To avoid this situation, banks
usually have a higher rate of interest on short-term loans
which increases the cost of borrowing.
 2. Easier accessibility can cause the borrower to fall into
the borrowing cycle. As a credit to short-term loans is
easily accessible, a borrower can fall prey to continuous
borrowing cycles.
 3. Timely repayment is helpful to increase credit score, but
missing the payments in the short-term can have a severe
impact on the credit score.