Re-profiling of liabilities

The principle of financial conformity establishes that short-term sources of financing (less than one year) should finance short-term applications (investments), and long-term sources should finance long-term applications.

Banks prefer to make short-term loans to reduce their risk, and companies are tempted to take short-term financing because the rates and guarantees may be lower.

The problem is that some companies suffer temporary profitability crises that may cause banks not to renew their credit quotas, and in these scenarios there is a serious liquidity risk.