# Commercial Paper

*Markets & Instruments — Finicade finance glossary*

Commercial paper is unsecured short-term corporate borrowing, usually under 270 days, used to fund payroll, inventory and receivables. It's cheap while it works and vanishes when it doesn't: the market is a confidence market, and in 2008 it froze within days, stranding blue-chip issuers who had assumed they could always roll it. That episode is the textbook example of liquidity risk being a funding structure problem, not an asset quality problem.

**Also known as:** CP, short-term corporate debt

**Related terms:** [Money Market Fund](https://finicade.com/glossary/money-market-fund), [Treasury Bill](https://finicade.com/glossary/treasury-bill), [Liquidity Risk](https://finicade.com/glossary/liquidity-risk), [Repo (Repurchase Agreement)](https://finicade.com/glossary/repo), [Credit Rating](https://finicade.com/glossary/credit-rating)

Source: https://finicade.com/glossary/commercial-paper