Business Planning and Financing Types

Short versus Long-Term Financing

The amount of the loan and the item being financed will determine the appropriate term of the loan. In general, smaller loans and loans for items with a limited useful life have a shorter term than larger loans and loans for durable items and real estate. The term of the loan is determined in large part by the lending practices of specific lenders. The following are general guidelines for the appropriate length of term for various types of loans.

Short-Term Financing

Short-Term Financing is typically repaid in one to three years. Types of short-term financing include:

Intermediate-Term Financing

Intermediate-Term financing is typically paid back in five to seven years. Types of intermediate-term financing include:

Long-Term Financing

Long-Term Financing with maturities up to twenty years or more are common for real property business expansions. Types of long-term financing include: