Title: The Advantages of Short-Term Debt | Small Business - Chron.com
Headings: The Advantages of Short-Term Debt
The Advantages of Short-Term Debt
Operating Capital
Emergency Funding
Expansion

Content: The Advantages of Short-Term Debt | Small Business - Chron.com
The Advantages of Short-Term Debt
Small Business
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Finances & Taxes
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Small Business Financing
By Mike Broemmel
Short-term debt is defined as a loan for a period of one year or less, according to InvestorWords.com. Businesses benefit from using short-term debt in different ways. Indeed, businesses of all types often rely upon short-term debt to keep their doors open, according to "Loan Financing Guide for Small Business Owners" by D. Neil Berdiev. Operating Capital
Operating capital is defined as cash available to pay for the day-to-day operations of a business, according to BusinessDictionary.com. Ideally, operating capital is available from the revenue generated by business operations. During the initial period a business is in operation, and at other times during its existence, revenue may not keep up with operational expenses. One of the advantages of short-term debt is ensuring that cash is available to satisfy the operating capital needs of a business. Short-term debt literally is used to keep a business running during times when the revenue stream temporarily is insufficient to meet operational needs. Emergency Funding
There is no way a business owner or manager can plan for every possible emergency situation. Although a business ideally maintains a reserve cash fund to at least deal with some expenses associated with an emergency situation, such an account is not always possible or funded sufficiently.