The following methods may be used to finance short-term capital:

1. Trade credit- Outstanding amounts payable to suppliers of raw materials and , consumable items and bills payable relating to credit purchases
2. Factoring - Assignment of book debts to a bank and receiving cash in advance with the responsibility of collecting the debts taken over by the bank on payment of specified charges.
3. Discounting bills of exchange-  When goods are sold on credit, bills of exchange are generally drawn for acceptance by the buyers of goods.
4. Bank overdraft and cash credit- Overdraft is a temporary arrangement with the bank which permits the company to overdraw from its current deposit account with the bank up to a certain limit. The overdraft facility is also granted against securities as in the case of cash credit.
5. Public deposits.