12
Sources of Short-Term Finance
OBJECTIVES
To analyse trade credit as a source of short-term funds
To focus on short-term funds financing by commercial banks, and the norms in this respect in India
To describe commercial papers as an instrument for short-term funds
After the discussion of the current assets, it is worthwhile to discuss how they are financed. It has already been mentioned that the current assets are financed partly with short-term funds and partly with long-term funds. However, the discussion in the present chapter is limited to the short-term funds or the current liabilities as they are an essential part of the net working capital.
Broadly speaking, there are two classes of short-term funds: spontaneous and negotiated. The ...
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