The Advantages For Short Term Finance
The Advantages For Short Term Finance
The Advantages For Short Term Finance
We all invest for our future. It can be for our dream home, child's education or for retirement. Each of these events occurs at different times in our lives. All these need to be planned within a proper time frame. Thus short term investment strategy within a well diversified, long term investment plan is the actual key to deal with future financial needs.
Short term finance can mean financing for several months to several years. Mainly financing secured within a time period of three years is considered short term finance. It has got either low yields or high risk. It depends upon the place where one is putting the money. But it is an important way to make profit from the cash, savings or liquid assets.
Small time investments help in making quick money within a short period of time with least amount of risk and penalties. In fact short term finance also helps in safe guarding long term investments within your investment portfolio. Long term investments are also good, but in case of emergency one is forced to liquidate long term investments sometime also at a loss. Here the bridging finance helps a lot. It comes to our help in time of our emergency.
More over short term finance helps business men and investors to take advantages of opportunities that require transactions to be completed very quickly. The main attraction of this type of financing is its speedy nature. It helps is getting the deal done as quickly as possible.
The situation where one can arrange for short term finances are as follows.
When one need to raise funds within a few days time.
When one need a second or third charge on a property
When one has poor credit history.
When one doesn't have any accounts.
When one needs to pay off arrears.
When one wants to borrow against current valuation.
In short term finance many lenders are able to provide 80% of loan to value ratio. Short term finance plays a very important role in modern economies. Thus it helps the senior management to meet all corporate needs by seeking loans that will mature in one year or less.
Short term finance helps an organization to overcome all its debts. It can make a world of difference to your business at time of crisis. It will help the business to grow smoothly. Use of credit cards, lines of credit, operating lease and small loans are some examples of short term finance. The interest rates for short term finance are always less. The short term loans also include accounts payable, leases, short term commercial loans, customer cash advances, bank over draft coverage and accounts receivable lending or factoring.
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