Short-Term Borrowings

In previous Communiqués, a variety of topics have been discussed, including borrowings from banks to commercial paper.  It is important to re-address those topics as they are part of short-term borrowings which has been proposed for further definition in recent months.

Short-term borrowings are current liabilities due for re-payment in one year or less.  Some examples of short-term borrowings include those mentioned previously as well as federal funds and other borrowings from financial institutions.

Many analysts will agree that the amount of short term borrowing(s) is important in assessing the financial health of a company because if the company does not have an amount of liquid assets greater than those obligations than their ability to pay their debts could be questioned.

It is for that reason and others the SEC (i.e. Security and Exchange Commission) issued a “Short-Term Borrowings Release” seeking that companies offer further disclosure in financial statements of those borrowings so that an outside investor can determine the effects of those on the future of the company.

If you would like to further discuss the availability of different financing tools, kindly contact Capital Corp Merchant Banking at info@capitalcorpmerchantbanking.com.

Respectfully,

Capital Corp Merchant Banking, Inc.