Question

Trade credit is the example of ______.

Options

• Long-term finance

• Medium-term finance

• Short-term finance

Answer 1

Trade credit is the example of short-term finance.

Explanation:

• Trade credit is a type of short-term financing that suppliers offer to companies.
• Businesses can use it to purchase products and services on credit and make payments later typically within 30 to 90 days.
• This reduces the immediate cash outflow and helps firms manage cash flow.