Robin Burden answered
Long-term finance is important because it keeps the economy ticking over.
Although the definition of 'long-term' depends on the type of financing you're talking about, it's impossible to deny that this type of financing is vital to the well-being of the global economy.
What's the importance of long term finance?
Companies rely heavily on long-term financing. Investment for expansions, new projects, purchases and maintenance often comes through long-term financing.
Essentially, the idea of long-term finance is that a company borrows money in order to invest or grow, and the returns on this then enable it to pay back the debt (whilst still retaining some profit).
This principle is fundamental to the idea of capital investment - and cash-flow management is the division of a business usually burdened with managing these financial transactions.
Long-term finance is also relevant to personal finance in terms of mortgages and personal loans to buy high-cost items such as houses and cars.
Although the definition of 'long-term' depends on the type of financing you're talking about, it's impossible to deny that this type of financing is vital to the well-being of the global economy.
What's the importance of long term finance?
Companies rely heavily on long-term financing. Investment for expansions, new projects, purchases and maintenance often comes through long-term financing.
Essentially, the idea of long-term finance is that a company borrows money in order to invest or grow, and the returns on this then enable it to pay back the debt (whilst still retaining some profit).
This principle is fundamental to the idea of capital investment - and cash-flow management is the division of a business usually burdened with managing these financial transactions.
Long-term finance is also relevant to personal finance in terms of mortgages and personal loans to buy high-cost items such as houses and cars.
