What Are Advantages Of Sources Of Short Term Finance?

There are various advantages of short term financing. The major advantage is that there is low liquidity risk therefore, it is easier to get short term finances as compare to long term finances. Secondly, the time period is short therefore, there is low interest rate which means that the cost of the loan is low as compare to other finances. For example, Treasury bonds and commercial deposits are the short term finances and they have very low interest rates. Thirdly, the interest rates are expected to increase in future therefore, the short term finances can lower your future interest rate risk.