What is Commercial Paper?
A definition of Commercial Paper
“Commercial paper is an unsecured, short-term debt instrument issued by corporations. Used for financing accounts receivable and inventories, it matures in 270 days or less.”

Business Glossary > What is Commercial Paper?
Examples of Commercial Paper in a Sentence:
Our company plans to issue commercial paper to raise funds for operations.
Investors view commercial paper as a low-risk investment option.
To manage liquidity, the bank invests heavily in commercial paper.
Why is Commercial Paper Important in Business?
Understanding commercial paper is crucial for corporate finance, as it provides a flexible way for companies to obtain short-term funding without collateral. By issuing commercial paper, companies can efficiently manage liquidity and fund immediate financial needs.
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Associated Terms
Here are some associated business terms and synonyms for “Commercial Paper”:
- Promissory Note
- Short-term Debt
- Unsecured Note
General Electric Commercial Paper
General Electric regularly issues commercial paper to cover its short-term liabilities. By maintaining a high credit rating, GE is able to issue this paper at attractive rates, ensuring ample funds for its operational needs without resorting to more expensive long-term debt.
Final Notes on Commercial Paper
When corporations consider issuing commercial paper, they should evaluate market conditions, interest rates, and their credit rating. Being mindful of these aspects helps in achieving favorable terms and ensuring successful issuance.
This has been a definition of Commercial Paper meaning.
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