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Define short-term finance: Short-term finance refers to funding that is available for less than one year - Leaving Cert Business - Question 9 - 2006
Question 9
Define short-term finance: Short-term finance refers to funding that is available for less than one year. This type of finance is typically used to cover short-term... show full transcript
Worked Solution & Example Answer:Define short-term finance: Short-term finance refers to funding that is available for less than one year - Leaving Cert Business - Question 9 - 2006
Step 1
Define short-term finance:
Answer
Short-term finance refers to funding that is available for less than one year. This type of finance is typically used to cover short-term assets, such as inventory or operational costs, ensuring that a business can meet its immediate financial obligations.
Step 2
Outline two short-term finance options available for an established manufacturing business:
Answer
(i) Trade Creditors: Many suppliers offer goods or services on credit, allowing businesses to pay for these after a sales cycle has completed.
(ii) Bank Overdraft: This facility allows businesses to withdraw more money than they have in their accounts, providing immediate cash flow to address short-term needs.