Three questions that settle it
How long will the thing you are funding produce value? How quickly will it generate a return? And what payment can the business carry in a poor month? Answer those honestly and the appropriate term is usually obvious.
Where short-term financing fits
Inventory, seasonal stock, a specific campaign, bridging a receivable. The return arrives quickly, so the repayment should too.
Where long-term financing fits
Property, major equipment, acquisitions and build-outs. These produce value for years and should not be squeezed into a few months of payments.
Combining both is normal
Many established businesses run a long-term facility for assets alongside a revolving line for working capital. The two structures do different jobs and work well together.
Related funding solution
Business Loans
Straightforward funding for a clear plan.