Commercial paper is an unsecured, short-term loan issued by a corporation with high credit ratings, typically for financing accounts receivable and inventories. It is usually issued at a discount, reflecting current market interest rates. Commercial paper is usually issued with denominations of $100,000 or more. Smaller investors invest in commercial paper indirectly through money market funds.
Commercial paper is available in a variety of denominations and usually ranges in maturity from 2 to 270 days. In addition to promissory notes, commercial paper may include drafts, bills of exchange and checks, acceptances, bills of lading, warehouse receipts, orders for delivery of goods, and express orders.
