Intro to Business › Section P · Financial management and securities markets › Topic P.3
Short-term financing
Cash rarely arrives exactly when bills fall due, so most firms borrow for weeks or months to bridge the gap. The choice among trade credit, bank lines, commercial paper and secured loans comes down to who can borrow, at what cost, and with what pledged.
In this topic
- Bridging the gap
- Unsecured and secured loans
- Trade credit
- Worked example: the cost of skipping a discount
- Bank lines and revolving credit
- Worked example: a revolver's true cost
- Commercial paper
- Secured loans: receivables and inventory
- Factoring
- Common mistakes to avoid
- Key takeaways
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