Short-Term Debt is debt on the account that stands for the current liabilities in the company’s balance sheet; only debt that is due within a year will be quoted in the account.

A portion of the long-term debt which is due within the same period may also be included in the account.

The short-term loans are represented by operating term loans which are due in a one year period and lines of credit that revolve. These loans serve to finance the daily operations of the company such as the purchase of supplies and inventory, and the salaries of the employees.