Short Term finance - This is money needed for the day-to-day running of a business.

Examples of short term finance:

• Overdraft
• Loan
• Trade Credit
• Factoring
• Hire-Purchase

Medium term Finance - This is for finance repaid between three to ten years. Usually used for; replacement of pieces of equipment, Expansion, converting a persistent overdraft into a loan

Examples:

• Loan
• Hire Purchase
• Leasing
• Retained Profit

Long term Finance - Usually debt paid over more than ten years. It is used for a business to achieve long-term growth.

Examples:

• Loan
• Sale of Assets
• Sale and leaseback
• Retained Profit
• Sales of Shares
• Debentures

Factors that influence a business on the method of finance:

• Security
• Time
• External influences
• Legal Structure
• Qualitative factors
• Quantitative factors.

Factors that influence a bank's decision to lend:

• What the finance is to be used for
• The company's credit reports
• The type of product being sold
• The current financial position of a business
• Financial Projections
• Nature of the market