A short term loan is a type of loan that is obtained to support a temporary personal or business capitalCapitalCapital is anything that increases one’s ability to generate value. It can be used to increase value across a wide range of categories, such as financial, social, physical, intellectual, etc.Loan received via direct credit from ABC Bank for 1,00,000 for new machinery. In the aforementioned example, total assets of the company increased by a hundred thousand and simultaneously their liabilities grew by the same amount.