What is a Commercial Paper?
Commercial papers are debt instruments that are often utilized to meet short-term credit needs. As an unsecured obligation that is often utilized as an investment in a money market account, the duration period for a commercial paper is limited. Generally, a commercial paper may carry a maturity from anywhere between one business day to six months from the date of issue. In most cases, a commercial paper note will be issued in denominations that are at least $100,000.00 US Dollars (USD). However, it is possible to issue a commercial paper note that is composed of multiple units of $1,000.00 USD that total to an amount exceeding the hundred thousand dollar mark. This can allow purchases of one or several units of the commercial paper, depending on the desires of the investor. Commercial paper is generally issued by corporations or by large banking institutions. The main function is usually to provide funds for the company’s Accounts Receivable in order to handle short-term obligations. T
