|
Particulars |
Long Term
Credit |
Short Term
Credit |
|
1. Definition |
A
form of finance that have a small, mid or
long repayment schedule |
A
form of finance that have a short repayment schedule |
|
2. Maturity period |
1 to 5 years, in some cases
it may be 20 years |
1 or less than 1 year |
|
3. Competitive interest rate |
competitively marginal or
low rate |
competitively high rate |
|
4. Lending complexity |
Some complex to lending except short-term lending |
Easy to lending |
|
5. Profitability |
Marginal profit |
High margin of profit |
|
6.
Risk |
Marginal or high risk |
Low risk |
|
7. Loan limit |
Loan limit is more |
Small Loan limit |
|
8. security |
need of temporary, permanent & valuable property as a |
No need of
permanent or valuable property as
a |