Long term financing means financing by loan or borrowing for a term of more than one year by way of issuing equity shares, by the form of debt financing, by long term loans, leases or bonds and it is done for usually big projects financing and expansion of the company and such long term financing is generally of high amount. External Commercial Borrowings is a long term source of finance. External Commercial Borrowings: An external commercial borrowing (ECB) is an instrument used in India to facilitate Indian companies to raise money outside the country in foreign currency. The government of India permits Indian corporates to raise money via ECB for expansion of existing capacity as well as for fresh investments. ECBs allow corporates to borrow a large volume of funds for a relatively long term. Thus, option 2 is the correct answer. Short term loans are called such because of how quickly the loan needs to be paid off. In most cases, it must be paid off within six months to a year. Any loan for a longer loan term than that is considered a medium-term or long-term loan. Commercial Paper: Commercial paper is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Factoring: A factor is an intermediary agent that provides cash or financing to companies by purchasing their accounts receivables. Factoring can help companies improve their short-term cash needs by selling their receivables in return for an injection of cash from the factoring company. The practice is also known as factoring, factoring finance, and accounts receivable financing. Line Of Credit: It is a kind of short-term loan. A line of credit is much like using a business credit card. A credit limit is set and the business is able to tap into the line of credit as needed. It makes monthly installment payments against whatever amount has been borrowed. Therefore, monthly payments due vary in accordance with how much of the line of credit has been accessed.