Q. Why is the short term finance needed?
Ans: A business Man requires short term finance to cater the following needs:
1. for the payment of premium of insurance
2. for meeting the contingent business expenses.
3. for the payment of Wages.
4. for paying the current liabilities of the business.
5. for paying the rent of the business premises as well as the interest on loans.
6. For the purchases of the business assets and,
7. for the payment of short term accounts payable due on the firm.