By:Kevin Stith Finance is what allows business to exist. Adequate finance is required to meet the various commitments arising out of business transactions. The financial requirements of business can be broadly classified into two categories- short-term sources and long-term sources. Short- term finance is required to meet the working capital requirements of a business firm. These are the funds required for a period up to 1 year. The sources of short-term finance are: trade credit, bank borrowings, factoring of receivables, commercial paper and accrued expenses and deferred income. Trade credit refers to the type of credit provided to customers by suppliers of goods in the normal cause of business transactions. The trade credit is easily available and is dependent on personal relationship between the supplier and the buyer. It also offers better access to small and newly established business concerns by selling the goods on credit basis. Banks constitute an important institutional source of financing the working capital requirements. Banks consider various aspects such as production and marketing plans of the customer while determining the credit requirements. The amount so determined by the bank is known as credit limit. Bankers are required to fix separate credit limits for various types of credit facilities to be extended to various types of borrowers. Margins are kept by the banker before granting finance. This is based on the principle of conservatism and is decided to ensure safety of funds. Banks extend the following type of financial facilities to customers: Over draft, Cash credit, Purchase or discounting of bills and demand loans. Over draft is a temporary arrangement whereby the customer is allowed to draw over and above the balance standing to the credit of the customer. Under cash credit facility, a borrower is permitted to withdraw funds from the bank up to the sanctioned credit limit. Demand loans are called the ad hoc or temporary financial accommodation granted to customers to meet unforeseen contingencies. The borrower has to pay a higher rate of interest on these types of advances. Article Source: http://www.dailynewarticles.com Bad Credit Fast Cash provides detailed information on fast cash, bad credit fast cash, fast cash advance, fast cash leasing and more. Bad Credit Fast Cash is affiliated with Online Advance Cash Requirements. More Articles from Loans Category: Student Loan Refinance And Its Value To Students Refinancing Home Mortgages to Extend Your Term The Advantgaes of Refinancing A Home Mortgage Bad Credit Auto Loan Refinance For You Various Aspects of Refinancing Refinance Your High Interest Current Mortgage Multifamily Refinancing, The Right Choice for You Refinance Loan Options And Know-how Streamline Refinancing Refinancing or Home Equity Loan: Which Way to Go? Re-Refinancing is the New Theme Refinancing Home Equity Loans The Need For Mortgage Guarantee Insurance Getting Financing From Banks For Real Estate Investing Steps For Those With Bad Credit To Obtain Small Business Loans