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What is the difference between short term finance and long term finance?
Wiki User
∙ 11y ago
1. Most short-term sources of financing occur over a period of less than a year to one year, although some sources can last up to three years or longer. Long-term financing that a longer period of time about 3-30 years or more. like home mortgages are typically available in 15- and 30-year durations.
2. Because short-term financing is repaid over a shorter length of time, the interest rate or cost to borrow money is smaller. Long-term sources such as bank loans have a higher interest rate due to the amount of time it takes to finance the loan and repay the capital.
Wiki User
∙ 11y ago
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