
Long-term Liabilities are liabilities that a business owes to its creditors that are due after 12 months.
On the other hand, Current Liabilities are liabilities that are due within 12 months.
Long term liabilities appear on the business Balance Sheet. Long-term debt is generally used to invest in long-term assets such as vehicles, equipment, and factories. These assets have a long lifespan and therefore it is appropriate and advisable to match them with long-term debt.
For example, a business might take out a 25-year mortgage with a bank to invest in a commercial building from which to operate its business.
Another common example is a business might seek equipment financing to buy equipment for its factory. This can have a loan term of 10 years.