Short-term Loan or Current Financing
The resources that are necessary to carry out the company’s current activities fall within what is known as circulating.
Definition and meaning
It is a loan of resources granted to a company for a short period of time, this can be a couple of months, or even weeks.
In the assets section, all sales that are in customers, pending collection could be financed in the short term . loanor helps companies and freelancers to have liquidity with great speed and agility, without having to wait for long evaluation processes. Since, in general, obtaining this type of financing is much simpler and fewer requirements are requested. Some of the essential formulas of short-term financing that we offer that have become very practical mechanisms for companies are factoring, discounting promissory notes or confirming.
Advantages of short-term financing:
Choosing short-term financing when obtaining liquidity for your company has the following advantages:
- Immediate liquidity: Possibility of charging at the end of your work without having to wait for the expiration date agreed with your client.
- Do not add CIRBE: The operations you perform in loanor will not be reflected in your CIRBE.
- Avoid unpaid: Avoid the risk of default with the option without recourse.
- Personalized and simple management: Sending invoice and I will pay our analysts will study the viability of the operation. You will have a business manager at your disposal to expand information on the services that best suit your needs and give you conditions of them.
Sources of short-term financing
The short-term financing is made up of the following financial services:
- Commercial discount: Through your effects you can get liquidity anticipating the collection of your sales without having to wait until the expiration date. This financing option can be used by any company or self-employed person whose clients pay for it through commercial effects.
- Factoring: This service allows you to collect your work from the moment you issue the invoice without waiting for the collection date agreed with your client.
- Confirming: Confirming simplifies the payment processes for the contracting company and offers its suppliers a line of financing that allows them to collect their invoices in advance. This financial service is aimed at companies and public institutions with many suppliers.
Alternatives for short-term financing
When internal financing is not enough to undertake certain projects, companies can count on sources of external or external financing, which is that obtained from sources that do not belong to the company.
The company will decide which financing best suits its liquidity needs, in the short, medium or long term. Foreign financing in the short term continues to be more demanded among Spanish companies.