Debt - Short Term

Short –term debt: 

Money from institutions to be repaid within 12 months; usually smaller amounts, usually unsecured (no underlying asset attached to loan).

• Bank Overdraft: facility with bank to overdraw and account to a specified limit, paying interest only when account in deficit.

• Commercial Bill: money borrowed from other firms looking to earn interest in excess funds not being used—typically over $100,000, from 3 to 12 months until maturity

• Factoring: the sale of Accounts Receivable for a discounted price, leading to instant injection of cash (liquidity). Not technically a debt. An expensive way to liquidate accounts receivable (for a fee).