Borrowing strategy

It's probably not good cash or debt management to finance equipment with short-term debt. Typically a machine purchase delivers benefits over a long-term period, and should be financed over that period.

Short-term debt should only be used to purchase equipment if the machine will produce benefits that directly contribute to paying off the loan in the short-term.

Rule of thumb: Use short-term debt for short-term capital requirements and long-term borrowing for long-term plans.