The commercial paper release will usually be posted daily at 9:45 am however, the federal reserve board makes no guarantee regarding the timing of the daily posting this policy is subject to change at any time without notice. Of the demand for commercial paper funds by finance companies and the reasons for their increased reliance on this source of short-term money are discussed in chapter 5. Finance companies have relied primarily on short-term commercial paper and other debt sources to finance asset growth false as a percent of assets, finance companies currently rely more heavily on commercial paper as a source of financing than in 1977.
Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable and inventories, and meeting short-term liabilities. In business finance: short-term financing the main sources of short-term financing are (1) trade credit, (2) commercial bank loans, (3) commercial paper, a specific type of promissory note, and (4) secured loans.
Commercial paper (cp) commercial paper evolved as a source of short term finance in our country in the early years of 1990s commercial paper can be defined as an unsecured promissory note issued by an organisation to raise funds for a short period of time ranging from 90 days to 364 days it is issued by one organisation to other business organizations viz, insurance companies, pension funds.
Commercial paper is a cheaper source of raising short-term finance as compared to the bank credit and proves to be effective even during period of tight bank credit however, it can be used as a source of finance only by large companies enjoying high credit rating and sound financial health. Commercial paper represents an unsecured, short-term, negotiable promissory note sold in the money market because these notes are a money instruments, only the most creditworthy companies are able to use commercial paper as a source of short-term financing.