finance choosing

Long-Term Financing Options:

There is a need to outline two long-term and short-term financing options for my company, as well as to provide explanation for my selections, after thoroughly analyzing the requirements of my organization, which include the construction of a new facility, the purchase of furniture, and computers.

A long-term bank loan is my first suggestion because it is typically one of the most established and feasible ways to secure funding for a project involving a new facility. There are a few causes for this option’s adaptation; such reasons include the fact that there are high chances of the availability of the required funds with banks and the possibility of paying back in bits over an extended period. The second option is the equity financing which the process by which firms’ issues shares for public subscriptions. The reason behind this choice is based on the fact that it provides the fund required for long-term investment and ensures the companies only pays dividends to shareholders yearly.

Short-Term Financing Options:

Based on the requirement of office furniture and computers for the proposed facility, I will recommend the adoption of some short-term financing options. First, I suggest the trade credit option, i.e., my firm gets the needed items on credit from the sellers and payback over a period of three months. The choice is adopted based on the availability of convenience provided by its gradual payback option. The next recommendation is a bank overdraft; the option allows bank customers to withdraw more than their bank balances and pay back over a specified period. The adoption of this choice is based on the provision of the required funds to satisfy firm’s requirements and a flexible payback period.