Both income and expenses may vary from month to month or from year to year. Short-Term Financing Needs. Short-term financing is money that will be used for one year or less and then repaid. Two deserve special attention. First, certain necessary business practices may affect a firm's cash flow and create a need for short-term financing.
Cash flow is the movement of money into and out of an organization.
Long-Term Financing Needs. Long-term financing is money that will be used for longer than one year. Long-term financing is needed to start a business. The Need for Financial Management. Without financing, there would be very little business.