What is short-term borrowing?

Short-term borrowing refers to the funds borrowed by an enterprise from external entities such as banks or other financial institutions to maintain normal production and operations or to pay off a certain debt, with a repayment period of less than one year (inclusive) year) various borrowings.

Extended information

Currently, short-term loans in my country are divided into production turnover loans, temporary loans, settlement loans, bill discount loans, etc. according to their purpose and use. According to international practice, short-term loans are often divided into one-time repayment loans and installment repayment loans according to different repayment methods; according to different interest payment methods, they are divided into collection method borrowings, discount method borrowings and interest rate increase method borrowings; according to the presence or absence of guarantees, they are divided into mortgages Borrowing and credit borrowing.

Types

(1) Operating working capital loans. Operating turnover loans, also known as production turnover loans, refer to loans obtained from banks or other financial institutions when an enterprise lacks the working capital required to produce and sell a certain number of products. This kind of loan is applied for within the annual borrowing plan approved by the bank, and the term is generally not more than one year.

(2) Bill discount borrowing. Bill discount borrowing refers to enterprises holding bank acceptance bills or commercial acceptance bills that apply for bill discount borrowing when encountering operational difficulties. The term should generally not exceed three months.

(3) Settlement of borrowings. Settlement borrowing means that when an enterprise uses the collection and commitment settlement method to conduct sales business, it entrusts a bank to collect payment after sending out the goods, and before the receiving bank notifies the purchasing unit to honor the payment, in order to solve the capital needs occupied by the settlement assets, it uses collection to The commitment settlement voucher guarantees the loan obtained from the bank.

(4) Seller’s Credit. Seller's credit refers to a loan that an enterprise whose products are included in the national plan and whose quality is in a leading position in the country applies to the bank for insufficient funds for production and operation after being approved to adopt installment collection sales.

Reference source Baidu Encyclopedia - What is the time limit for short-term borrowing, long-term borrowing and short-term borrowing?

The difference between short-term borrowing and long-term borrowing literally lies in the length of time the borrower uses the loan. Generally speaking, short-term loans refer to loans that the borrower applies for within 1 year (including 1 year), and long-term loans refer to loans that the borrower uses for more than one year.

Of course, short-term loans do not have a minimum loan period, but the minimum period varies according to different banks and lending institutions. Some banks stipulate that the short-term loan period applied by the borrower cannot be less than 3 months. Individual lending institutions can apply for short-term loans for a minimum period of not less than 1 month. Because short-term loans may only be used for a short period of time for borrowers and do not take too long, borrowers usually ask multiple times about the shortest time for which they can apply for a loan.

However, because borrowers are not clear about how to handle short-term loans from banks and lending institutions, as well as related lending policies and application conditions and requirements, they still cannot find a loan product that suits them after spending a lot of time. Excessive interest payments were made. Is a ten-month loan considered short-term or long-term?

Short-term. Bank loans are divided into short-term loans, medium-term loans and long-term loans by term. Those within three months are called temporary loans, those between three and nine months are called current loans, and those over nine months are called revolving loans. A loan of 12 months is considered a short-term loan, and a loan of more than 12 months is considered a long-term loan. Short-term borrowing time

Short-term borrowing time is generally within 3 months.

1. At present, the shortest loan period is four days, and the maximum amount is more than 10. Generally, small-amount loans do not have a short period. Banks can still handle the shortest-term loans.

2. General short-term loans are chosen for temporary use of money, and the general term is within three months. There is also a type of current loan that generally has a loan term of three to nine months. There is a type of loan called a revolving loan, and the term of this type of loan is generally more than nine months.

3. Banks refer to loans within one year as short-term borrowings (loans). Bank loans have advantages and disadvantages. If your bank loan is overdue, you will face high liquidated damages. , Therefore, the most critical thing about bank short-term loans is how to weigh their impact, maximize the advantages of short-term loans, and truly solve our capital shortage problem.

1. Short-term loans (Short Term Loan or Short Term Loans) refer to various loans borrowed by enterprises from banks or other financial institutions with a repayment period within one year based on the needs of production and operations, including production Revolving loans, temporary loans, etc.

2. The opposite is long-term borrowing. In terms of accounting practice in China, short-term borrowing refers to the funds borrowed by an enterprise from external entities such as banks or other financial institutions to maintain normal production and operations or to pay off a certain debt, with a repayment period of less than one year ( Various borrowings including one year).

3. Short-term borrowings mainly include operating turnover borrowings, temporary borrowings, settlement borrowings, bill discount borrowings, seller's credit, pre-purchase deposit borrowings and special reserve borrowings. The accounting of short-term borrowings mainly includes three aspects. : First, the accounting for obtaining a loan (when an enterprise borrows money from a bank or other financial institution, it should sign a loan contract, indicating the loan amount, borrowing interest rate and repayment time, etc.); second, the accounting for the loan interest; third, the return Accounting for borrowings. Short-term loans generally have a short term and are usually recorded based on the amount obtained on the date the loan is obtained. Interest expenses on short-term borrowings are expenses incurred in raising funds during corporate accounting activities and should be included in the current profit and loss as a financial expense. Because interest is paid in different ways, its accounting is not exactly the same. If the interest on short-term borrowings is calculated and collected on a monthly basis, or the principal and interest are repaid in one go, but the amount of interest is not large, the interest expense can be directly included in the current profit and loss; The principal and interest are paid in one lump sum, but when the amount of interest is large, the accrual method can be used to accrue, confirm and charge monthly.