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

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;



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;



    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

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.