Which type of financing does it need?
– Trade credit
– Accounts receivable
– Inventory
–
Bank loan
———
What is an advantage of short-term financing?
– Restrictive loan requirements
– Increased liquidity
– Multiyear repayment terms
– Lower interest rates
———
A company plans to expand into new sales territories and decides to obtain a long-term
loan.
What is an advantage of long-term financing?
– Lowers leverage by paying more interest
– Increases stockholder ownership
– The interest is tax deductible
– Creditors prefer companies with lower equity levels
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