Short-term financing may be riskier than long-term financing since, during periods of tight credit, the firm may not be able to rollover (renew) its debt.

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Short-term financing typically involves borrowing funds that are due within a year or less, while long-term financing involves borrowing funds that are due over several years. During periods of tight credit, lenders may be less willing to extend short-term loans or renew existing short-term debt, which can lead to liquidity issues and financial distress for the firm. Therefore, short-term financing is considered riskier than long-term financing in this context.

Short-Term Financing May Be Riskier Than Long-Term Financing Since, During