Short Term Working Capital B11-03b
Provide some advantages and disadvantages of trade payables as a form of financing.
- Advantages:
- Little or no legal documentation required; flexible; generally no interest; unsecured; discounts offered.
- Disadvantages:
- Higher effective cost if discounts are not taken.
- Requires repayment in the short-term.
- Trade payables are the only means and application of the financing.
