Question

define short term financing. discuss trade credit as a spontaneous source of financing

Answer 1

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Short- term financing is most common for financing of current assets such as accounts receivable and inventories. Seasonal businesses that must build inventories in anticipation of selling requirements often need short - term financing for the interim period between seasons.

Trade credit is the credit extended by one trader to another for purchasing goods or services .Trade credit is a spontaneous source of financing because it facilities the purchase of supplies on credit. Small and new firms are usually more dependent on trade credit, as they find it relatively difficult to obtain funds from other sources.


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Answer 2

Answer:

Explanation:

Short- term financing is most common for financing of current assets such as accounts receivable and inventories. Seasonal businesses that must build inventories in anticipation of selling requirements often need short - term financing for the interim period between seasons.

Trade credit is the credit extended by one trader to another for purchasing goods or services .Trade credit is a spontaneous source of financing because it facilities the purchase of supplies on credit. Small and new firms are usually more dependent on trade credit, as they find it relatively difficult to obtain funds from other sources.