Define: Commercial Paper

Business, Legal & Accounting Glossary

Definition: Commercial Paper


Quick Summary of Commercial Paper


A method of borrowing money from commercial institutions such as banks.



What is the dictionary definition of Commercial Paper?

Dictionary Definition


short-term unsecured promissory notes issued by companies.


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Full Definition of Commercial Paper


Commercial paper is a debt instrument issued by well-established companies to meet short-term financing needs. Commercial paper calls for the payment of money at a specified date, usually within two to 270 days. Issuers tend to issue commercial paper to help manage short-term cash flow at a low cost since commercial paper is usually sold at a discount. Investors consider moving their investment dollars into commercial paper when they are looking to park idle cash in a safe and liquid investment vehicle. Commercial paper tends to be a very low-risk investment since it is issued by companies with high credit ratings and is backed by bank lines of credit. The low risk that commercial paper provides comes at a price – low yields.


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Synonyms For Commercial Paper


trade effects, trade purposes, promissory notes, negotiable instrument, trade bills


Cite Term


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Page URL
https://payrollheaven.com/define/commercial-paper/
Modern Language Association (MLA):
Commercial Paper. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 07, 2020 https://payrollheaven.com/define/commercial-paper/.
Chicago Manual of Style (CMS):
Commercial Paper. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/commercial-paper/ (accessed: April 07, 2020).
American Psychological Association (APA):
Commercial Paper. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/commercial-paper/

Definition Sources


Definitions for Commercial Paper are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February, 2020