Answer:
Explanation:
Trade Credit is the credit extend by the account payable, according terms with the suppliers, which can be free of interest for a certain ammount of time (n/30) and from there they start to generate interest.
Remember:
Short-term financing are financing tools used for period of less than a year
Other short-term financing are:
The right answer to fill in the missing parts of the problem is Trade credit.
Credit is the granting of the use of money or goods to another person at a certain time with a guarantee or not with collateral, by providing services of interest, or without interest.
In general, types of loans can be classified based on their use, purpose, period, and business sector.
Type of credit Based on its use
1. Investment Credit
It is a credit given by a bank for business expansion or development purposes.
2. Working Capital Loans
It is a credit given by a bank to increase the production operation capability of a company.
Types of Credit-Based on Purpose
1. Earning Credit
Used to increase business or production or investment
2. Consumer credit
It is a credit given by banks to the public for personal or institutional consumption.
3. Trade Credit
Credit given by banks to buy commodities or goods to be traded or resold. Debt payments are expected from the sale of the merchandise.
Type of Credit-Based on Term
1. Short-term Credit
Loans with maturities of less than one year or a repayment maturity of at most one year.
2. Medium-term Credit
Medium-term loans are loans issued by banks with repayment periods ranging from one year to three years.
3. Long-term Credit
Long-term credit is a loan that has a repayment period of more than 3 years or 5 years.
Business Sector Based Credit
1. Agricultural Credit
Loans disbursed to finance the agricultural sector or smallholder plantations.
2. Farm Credit
Credit issued to finance the livestock business sector with short-term or long-term credit
3. Industrial Credit
Loans disbursed by banks to finance small, medium or large industrial sectors.
4. etc.
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Details
Class: College
Subject: Bussines
Keyword: Type of credit.
