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Corporate Finance #7 Short Term Financing
Rating: 4.6 out of 5(227 ratings)
36,841 students

Corporate Finance #7 Short Term Financing

Learn short term financing decision making from a Certified Public Accountant (CPA)
Created byRobert (Bob) Steele
Last updated 2/2022
English
English [Auto],

What you'll learn

  • List short term financing options
  • Understand accounts payable financing strategy
  • Explain bank credit options
  • Define commercial paper financing and when it may be used
  • Define collateral and explain how it may apply to short term financing
  • Understand accounts receivable financing
  • Explain inventory financing

Course content

3 sections • 27 lectures • 6h 35m total length

  • 805 Accounts Payable or Trade Credit7:35

    Explore how accounts payable or trade credit fuels short-term financing, balancing cash flow, discounts, and payment terms while tracking net credit position with receivables.

  • 810 Credit from Bank12:36

    Explore short-term bank financing options, including the prime rate, Libor, compensating balances, and term loans, and learn to compare loans using the effective interest rate.

  • 815 Commercial Paper Financing2:19

    Analyze corporate finance's short-term financing via commercial paper, an unsecured note issued to the public with a twenty-five thousand minimum; book-entry and direct paper forms offer below-prime rates with risk.

  • 820 Collateral & Short-Term Financing3:12

    Collateral and short-term financing help banks manage risk and secure loan repayment. When risk rises, banks may raise interest, require minimum balances, or demand collateral to guarantee repayment.

  • 825 Accounts Receivable Financing6:34
  • 830 Inventory Financing7:25

    Explore inventory financing as a short-term tool to boost cash flow by using inventory and accounts receivable as collateral, enabling rapid reinvestment in growth.

Requirements

  • Have a understanding of basic financial accounting concepts

Description

This course will discuss short term financing options from a corporate finance perspective.

We will include many example problems, both in the format of presentations and Excel worksheet problems. The Excel worksheet presentations will include a downloadable Excel workbook with at least two tabs, one with the answer, the second with a preformatted worksheet that can be completed in a step-by-step process along with the instructional videos.

Learners will understand accounts payable and trade credit as options from the perspective of short-term financing. A company’s cash management and financing strategy related to accounts payable would generally be to extend payment terms as long as possible without incurring penalties or straining the relationship with vendors.

We will also discuss credit options from a bank and commercial paper financing. When considering short-term credit options from a bank the company will want to consider the cost of the loan, the interest charged. One type of short-term loan is a term loan, credit often extended for one to seven years. Term loans are often repaid in monthly or quarterly installments.

Commercial paper is generally a short-term unsecured promissory note. Usually issued to the public in $25,000 minimum units.

This course will consider collateral as it relates to short-term financing. Collateral generally represents some form of asset securing the loan. Collateral may be used when a bank believes the loan is a higher risk.

We will also discuss accounts receivable and inventory financing.

Who this course is for:

  • Finance students
  • Business professionals

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