Example of Short, Medium and Long Term Financing Times

In social and commercial life there are financing times in the short, medium and long term, since in a company one of the most important activities is to finance everything that is done in it; But financing is not exclusive to business life, and individuals also make use of such financing.

We will mention short, medium and long-term financing, which are those used in everyday life.

1.- It is called short-term financing, to all financing that has a duration of less than one year from its inception to its completion.

2.- It is called medium-term financing to financing that has a completion time of more than one year, but less than 5 years.

3.- Long-term financing is called any financing that has a duration of more than 5 years for its completion.

Example of financing times in the short, medium and long term:

Short-term financing example:

A short-term financing is one in which a company or individual makes a purchase or investment in a period of less than a year.

A bank investment with a six-month term, the purchase of 28-day cetes, loans repayable in six and twelve months, are examples of short financing term, and a more used example is purchases in self-service stores, in which products are purchased at six or twelve months, either with or without interests.

Example of medium-term financing:

An example of this type of financing can be the acquisition of a car, through “Auto financing”, in this financing a vehicle is acquired through a down payment, and you can be enjoying the benefit of the vehicle while the installments continue to be paid until the purchase of the same is completed, the terms can cover 12, 24 and up to 48 months.

Long-term financing example:

A long-term financing is one that has a duration of more than five years, and we can exemplify this financing with a scholarship or sponsorship, in which you receive help from an institution or the government, and the result or completion exceeds 5 years of the course of the race.

Another clear example of long-term financing that is better suited to exemplify is the mortgage; The mortgage is a financing that is projected in a term greater than 5 years, and in that term the loan made must be paid, under penalty of losing the guarantee, which consists of the property.