Businesses generally use short-term loans to obtain new equipment and fund expansion.

Name: Businesses generally use short-term loans to obtain new equipment and fund expansion.
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Question

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Businesses generally use long-term loans for acquiring new equipment and funding expansion due to the substantial investment and longer time needed to pay back the loan. Short-term loans are typically used for immediate operational needs like inventory purchase or covering temporary cash flow shortages.

Businesses Generally Use Short-Term Loans to Obtain New Equipment and Fund