Medium-term sources of finance can be defined as sources of finance that are usually available for three to five years, and it is used to finance an expansion and modernization of existing business or purchase fixed assets. It is also used to purchase costly raw materials, repair and maintenance.

Finance is like the blood of business. Many businesses fail because they cannot finance the funds to run the business. To make a business successful, you have to make your plan about sources of fund, how you are going to finance, what type of finance you need for your business and so on. And you have to take action on time so that your business does not face financial crisis. Medium term source of finance helps a business to expand and run the business smoothly.