Commercial Paper is an obligation that matures within how many days?

Commercial paper is a type of unsecured, short-term debt instrument that companies use to obtain funds for working capital needs. It typically matures in a very short time frame, with a maximum maturity of 270 days. This characteristic makes commercial paper an attractive financing option for corporations since it allows them to quickly access cash without the stringent regulatory requirements associated with other forms of borrowing, such as standard loans.

Being a short-term financing tool, companies often issue commercial paper to manage liquidity and cover immediate expenses, ensuring that they can meet their operating needs without incurring long-term debt obligations. The maximum limit of 270 days aligns with its purpose of providing quick liquidity while remaining a flexible and efficient tool for firms looking to manage their cash flow in the short-term market.