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  Maintaining healthy cash flow can be challenging; between ongoing expenses and bills, poor cash flow can severely impact your customers, staff and bottom line. Business owners need to understand the differences between short and long-term financing when developing a cash flow strategy. There are various sources of finance available and each source of finance is useful for different situations. Choosing the right source and mix of financing options is crucial for good cash flow, so it is important to first determine your needs and then match a financing option to meet those needs. Financing options are often classified into two categories based on time period: short-term and long-term. Below are the key differences: Short-term financing Short term financing (working capital financing) relates to the finance needs that arise to finance current assets - for a period of less than one year. Working capital is used in the business’ day-to-day trading operations. Short-term financing can he