What is commercial paper in business?

Commercial paper is a short-term debt instrument issued by companies to raise funds generally for a time period up to one year. It is a money-market security issued (sold) by large corporations in the commercial paper market to obtain funds to meet short-term debt obligations. It is backed only by an issuing bank or company’s promise to pay the face amount on the maturity date specified on the note.

Further Readings – 

  1. Types of Cheque in Indian Banking System
  2. Chequebook Diplomacy
  3. Financial Market
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