Which of the following is NOT considered a long-term source of finance for a business?

The correct choice identifies that a medium term loan is generally not considered a long-term source of finance for a business. Long-term sources of finance are defined as those funds that are intended for use over a period longer than one year. They are typically used for investments in fixed assets, such as property or equipment.

A medium term loan, as the name suggests, is typically repaid over a shorter timeframe, usually between one to five years. This classification places it snugly in the medium-term financing category rather than in the long-term category.

In contrast, grants are often considered long-term as they may provide funding without the expectation of repayment, making them a lasting source of capital for businesses. Retained earnings represent profits that are reinvested into the business, serving as a sustainable long-term financing option. Share capital represents funds raised by issuing shares to investors, contributing to the long-term equity of the firm.

Thus, the medium term loan stands apart from these options in that its structure and repayment terms align it with medium, rather than long-term, financing strategies.