Finance that will be used or repaid over a period longer than a year is called?

Finance that will be used or repaid over a period longer than a year is categorized as long-term finance. This type of financing is typically used for significant investments, such as purchasing property, equipment, or funding large projects that require time to generate returns. Long-term finance often includes sources such as bank loans, bonds, and equity investments.

This distinction is essential in business studies as it impacts an organization’s cash flow management and financial planning. By securing long-term finance, businesses can spread the cost of their investments over multiple years, making it more manageable while allowing them to focus on growth opportunities without the pressure of short-term repayment obligations. Understanding this concept helps students appreciate different financing strategies and their implications for business sustainability and growth.