Source or Type Of Short-term Finance: Short-term loan

September 10th, 2008 Comments off
Share |

Append below features of Short Term Loan, the advantages and disadvantages of using Short Term Loan:

 

Features & Salient Points

  • Fixed amount and have a fixed period of time to repay the loan;
  • Interest rate is fixed;
  • Duration from few months to few years;
  • Repayments either in installments or bullet type meaning one lump sum repayment;
  • Interest is charge on the amount borrowed;
  • Like bank overdraft, need to provide security or collateral for the lender bank;

Advantages

 

The company does not need to pay back immediately especially when they embark on medium to long term projects/investments. So it is more secure than bank overdraft;

Disadvantages

 

    The interest rate is fixed. Un-conducive particularly when interest rates trends are moving downward;

Go to All Articles on Sources or Types Of Short Term Finances

Comments are closed now.

Financial Accounting

 
 

Advertise Here | Brain Teasers/Puzzles | Greeting Cards | Inspirational Quotes | Jokes/Humor | Useful Links | Motivational Stories | Resource | Shopping | Share/Express Your Views | Testimonials | Universities/Colleges | Words of Wisdom from Religions | FREE POSTING OF ACCOUNTING & FINANCE JOBS VACANCY|