What Does Commercial Paper Mean

Commercial paper is a money-market security issued by large corporations to obtain funds to meet short-term debt obligations (for example, payroll) and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note.

What is commercial paper and examples?

Commercial paper is a money-market security issued by large corporations to obtain funds to meet short-term debt obligations (for example, payroll) and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note.

What is the difference between bank loans and commercial paper?

Commercial loans and commercial paper are two ways corporations obtain capital in order to finance a variety of business activities. Commercial loans operate similar to consumer loans, while commercial paper is more similar to issuing corporate bonds.