SOURCES OF SHORT-TERM FUNDING

Here I will try to describe the short-term funding as I know, immediately wrote on the subject

A. Type Short-Term Funding

1. Spontaneous Financing (spontaneous financing) is a type of financing that changes automatically with changes in the level of corporate activities (eg visits from the sale of the company). Examples: accounts payable and accrued debt.
2. Funding Not Spontaneous (non-spontaneous financing) is a type of funding that do not change automatically with changes in the level of corporate activity. Example: debt obtained from banks.

B. Funding Spontaneous (Spontaneous Financing)
Type the characters in this funding if the activities of the company changed the source pendanaanpun also change automatically.
Some forms of spontaneous sources of funds include: accounts payable accrual accounts (eg payment of wages / salary or payment of taxes). Accounts payable arise because companies buy supplies from suppliers on credit, while the tax debt due to the tax payable on a certain date in a year.

C. Funding Not Spontaneous (Nonspontaneous Financing)
Type the characters that this funding has to acquire, increase or reduce funds, companies need time for negotiations or formal negotiations. Some form of financial resources have been spontaneous, among others:

1. Commersial Paper. It is a short-term debt securities (duration 30-90 days), the company issued unsecured besardan sold directly to investors. Usually, only large companies that could issue paper commersial.
2. Credit Loan. Derived from financial institutions and non-bank financial institutions. Loans from banks there are 2 types: (a) Credit transactions, ie loans that are designated for specific purposes. (B) Credit Line (Line of Credit), with these loans, borrowers can borrow borrow up to a certain maximum amount, which is the ceiling (upper limit of the loan).
3. Factoring means selling or factoring accounts receivable. In terms of enterprises that have accounts receivable, factoring has benefits because the company does not need to wait until the receivables are due for obtaining cash. Receivables also benefited because factoring is an alternative investment.
4. Pledge Receivables. Another alternative is the use of selling accounts receivable accounts receivable as collateral to obtain loans (pledging receivables). With this alternative, there is ownership of receivables in the hands of the company. If the loan is not repaid, the receivables are pledged as collateral can be used to repay the loan (the guarantee can be made on all accounts).
5. Pledge Merchandising (Inventory). Companies can pledge merchandise to obtain a loan. The procedure used will be equal to guarantee amounts. Guarantor will evaluate the value of inventories, and will provide a loan in a specific percentage of the value of p [ersediaan warranted.
6. Bank acceptances.
7. Repo.

D. Evaluation of Short-Term Funding Sources
To determine the short-term funding source financial managers can evaluate by using the framework:

* Overall financing strategy
* Cost
* Availability
* Flexibility

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