Which type of business typically resorts to more short-term finance?

An aggressive business typically resorts to more short-term finance as part of its strategy to pursue rapid growth and take advantage of market opportunities. This type of business often seeks to maximize returns on investment, and using short-term financing allows it to maintain flexibility and respond quickly to changing market conditions. By leveraging short-term financing options, such as lines of credit or short-term loans, aggressive businesses can fund immediate operational needs, invest in opportunities for expansion, or manage cash flow fluctuations more effectively.

Short-term financing is generally associated with lower interest rates compared to long-term borrowing, making it an attractive option for businesses that are actively seeking to grow and expand. However, it also entails higher risks, as the reliance on short-term funds can lead to cash flow pressures if not managed properly. This aligns with the nature of aggressive businesses, which often prioritize growth strategies that can involve taking on more risk.

In contrast, defensive businesses tend to focus on stability and risk reduction, opting for more long-term financing to secure their operations and reduce exposure during economic downturns. Average businesses may adopt a balanced approach, while non-profit businesses often rely on grants and funding sources that may not align with traditional debt financing strategies. Consequently, aggressive businesses are distinctively characterized by their need for short-term