Question

commerce bank (borrowed fund-short and medium - term finance​

Answer 1

Everything you need to know about the short-term sources of finance for a firm. Short-term financing may be defined as the credit or loan facility extended to an enterprise for a period of less than one year.

It is a credit arrangement provided to an enterprise to bridge the gap between income and expenses in the short run. It helps the enterprise to manage its current liabilities, such as payment of salaries and wages to labors and procurement of raw materials and inventory.

The availability of short-term funds ensures the sufficient liquidity in the enterprise. It facilitates the smooth functioning of the enterprise’s day-to-day activities.