Final answer:
Short-term external sources of debt finance include bank loans and corporate bonds. Bank loans provide immediate funds for short-term needs and must be repaid with interest. Short-term corporate bonds or commercial paper also serve as a means for companies to raise capital quickly.
Step-by-step explanation:
Two short-term external sources of debt finance are bank loans and corporate bonds. Firstly, bank loans are a common source of short-term financing for businesses. A bank loan provides immediate funds with the requirement that it'll be repaid with interest over a set period, typically under one year. Secondly, a corporate bond is a debt security issued by a company to raise capital. While typically associated with longer-term financing, there are short-term bonds, known as commercial paper, which mature within a year and are used for immediate working capital needs.
When seeking financial resources, businesses must consider how they will repay the capital. Government entities might issue bonds like municipal, state, or Treasury bonds to meet their own financing needs, reflecting the demand side of financial capital, as outlined in the national savings and investment identity.