1. 1 PEMBELANJAAN PERUSAHAAN LECTURE 4a – SOURCES OF SHORT TERM FINANCING

2. PP/MB-IPB/10 2 Short-Term Financing Alternative financing policies Advantages and disadvantages Advantages and disadvantages Sources of short-term financing Cost of each source of financing Cost of each source of financing Choosing a bank

3. PP/MB-IPB/10 3 Advantages and Disadvantages of Short-term Financing Speed : faster than long-term credit Flexibility : agreement generally less restrictive and if the firm’s business is seasonal, it may not want to commit itself to long-term debt for three reasons: 1. Floating costs are higher for long-term 2. Repayment penalties on long-term debt can be expensive, and 3. Long-term loan agreements contain provisions, which constrain the firm’s future actions.

4. PP/MB-IPB/10 4 Advantages and Disadvantages of Short-term Financing (Cont ’ d) Cost: interest rates are generally lower on short- term than long-term debt Risk: short-term financing is at disadvantage to long-term, because of the extra risk that it carries 1. 1. The lender can demand payment on short notice 2. 2. The cost of the loan will increase if interest rates increase

5. PP/MB-IPB/10 Untuk melihat file lengkapnya silahkan menghubungi kami di www.mb.ipb.ac.id www.mb.ipb.ac.id