Definition

Getting funds that need to be repaid within a year to cover immediate expenses. It helps manage cash flow during busy or lean times.

What to consider

  • Consider the impact on long-term cash flow.
  • Compare interest rates and loan terms.
  • Ensure growth projections justify the financing.

Real world scenarios

  • A company takes a five-year loan to expand its production facility.
  • An entrepreneur secures long-term debt to build a new office complex.
  • A startup uses long-term financing to support strategic, multi-year growth initiatives.

Related terms

Entrepreneurial Finances