Short Term Financing Option 

Short term finance is also known as corporate finance. To run a business we need a huge amount of capital. Depending on its nature and type of business, we decide what type of finance will suit our business. Finance is the art and science of capital management. Business finance, personal finance and public finance are the three general areas of finance. Time, money and risks are the concepts which deal with the field of finance. They include lending money as well as saving money. As an example, payroll expenditure is a type of finance which is common to all the business. Whereas daily expenditure is a type of finance which an organization or a company or an individual requires money immediately to start a business or run the existing business, whereas payroll expenditure is short term expenditure which needs short term finance. In other hand recurring expenditure is a long term expenditure which needs long term finance. A firm needs different sources of finance to run the business according to its need and according to its eligibility. Banks and financial institutions are most widely accessed and the major institutions which provides finance to business as well as individual. 

Maximize corporate values while managing the firm’s financial risk is the primary goal of corporate finance. Short term decisions deals with short term balances of current assets and the current liability. Working capital management is the heading which is grouped under short term decisions. The focus of short term decision is on managing cash, short term borrowing and lending money. Corporate finance is also associated with investment banking. Even there are such bad conditions when a firm is not in a position to access finance from banks on account of various constraint. Sometimes the company is in strong financial positions that it issues commercial papers and various funds. Commercial papers are used to meet short term financing requirements. The common feature of commercial paper in the countries is that it is unsecured and it is a short term debt instrument. Every country has different rules regarding cp business. The commercial paper matures in a year. The maturity is neither more or less than face value of commercial paper. Many firms use funds from commercial paper for long term investment. This is also called bridge financing. Overdraft, loans from families and friends and credit from suppliers are included in short term financing option. These should be repaved as early as possible. So it is called short term investment. Working capital is the finance we need to meet our daily need such as electricity bills, material, and wages of labor, money to be deposited in bank, stock and working capital