Short-term financing is riskier than long-term financing since,during periods of tight credit,the firm may not be able to rollover (renew)its debt.This is especially true if the funds are used to finance long-term assets rather than short-term assets.

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Short-term financing is riskier than long-term financing because during tight credit periods, the firm may not be able to renew or rollover the debt. This risk is higher if the funds are used to finance long-term assets compared to short-term assets. This can lead to financial distress and even bankruptcy for the firm. Hence, Short-term financing is riskier than long-term financing.

Short-Term Financing Is Riskier Than Long-Term Financing Since,during Periods of Tight