One thing that set business aside is it's own existence regardless of the owners or investors. The success or otherwise of any business depends on the people who have been appointed to manage and run the day to day operations or activities of the business. There are different types sources of funds available to business and how these sources can be assessed is largely depends on how the business is positioned.

Below are sources of short term finance mostly used by business across the globe.

Short-term finance is a method used by companies to address day to day cash requirements of the business with the aim to settle within 12 months

Some of the short-term sources of financing are: Trade Credit, Unsecured Bank Loans, Bank Over-drafts, Commercial Papers, Secured Short-term loans.

Trade Credit is an agreement between buyer and a seller of goods. In this case, the buyer of the goods purchases the goods on a credit i.e. the buyer pays no cash to the seller at the time of buying the goods, only to pay at a later specified date. Trade credit is based on mutual trust that the buyer of the goods will pay the amount of cash after a specified date. For instance Purchase order, Supply Chain, Letters of Credit.

Bank Overdraft is a type of short-term credit which is offered to an individual or a business entity having a current account which is subject to the bank’s regulation. In this case, an individual or a business entity can withdraw cash more than what is present in the account. Interest is charged on the amount of over-draft which is withdrawn as a credit from the bank.

Unsecured Bank Loan is a type of credit which banks are ready to give and is payable within 12 months. The reason why it is called an unsecured bank loan is that no collateral is required by the individual or a business entity taking this loan. Examples are Cash Advance, Line of credit, Credit cards and payday loan etc