Report Code: A15386 | Pages: NA | Mar 2023 | 1341 Views | ||
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Pandemic disrupted the entire world and affected many industries.
Get detailed COVID-19 impact analysis on the Commercial Paper Market
Request Now !Commercial paper is an unsecured promissory note that has a fixed maturity of no more than 270 days in the global financial market. Commercial paper is a money-market security issued by large corporations to obtain funds to meet short-term debt obligations and is backed solely by the issuing bank's or company's promise to pay the face amount on the maturity date specified. As it is not collateralized, only companies with excellent credit ratings from a reputable credit rating agency will be able to sell commercial paper at a reasonable price.Â
Commercial paper is typically sold at a discount to face value and has lower interest repayment rates than bonds due to commercial paper's shorter maturities. Therefore, redemption on the fixed maturity date, easy accessibility of the fund, and the cost saved by the business is expected to boost the market growth for the commercial paper market in the near future.
The global commercial paper market is segmented on the basis of type, end user, and region. Based on type, the market is divided into promissory notes, drafts, checks, and certificates. On the basis of end user, the market is categorized into retail, institutional, high-net-worth individual (HNWI), and corporates. Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).
Top Impacting Factors
Trade of commercial paper through digitalization and increased investment in commercial paper is driving the growth of the market. However, risk allocation in the security market is expected to hamper the growth of the market. Contrarily, the rise in investments through fintech technology and the rise in the adoption of digital platforms can be seen as an opportunity for the market.
Trade of Commercial Paper Through Digitization
The size of the commercial paper market is expected to grow as a result of digitization. A large volume of physical paper documentation is required for trade finance procedures. As a result, document-related expenses make up the majority of commercial paper expenses. To be successful, banks' commercial paper offerings must be adaptable, flexible, low-cost, and add value to their cost availability of funds for a shorter period. Increased use of digital, automated fund transfer platforms and demand for commercial paper are propelling the growth of the market.
Increased Investment in Commercial Paper
An increase in emphasis on domestic investment and mobilization and allocation of income toward profitable investments are some of the factors that propel the growth of the market. Moreover, it enables small and large fund savers globally to participate in investment plans and derive the benefits of capital market growth.Â
Furthermore, the commercial paper market has witnessed massive expansion and standardization in terms of products and services offered, the increased proliferation of a large number of private sector funds, and regulatory mechanisms, which consequently fueled the market growth. Thus, these factors have contributed to driving the growth of the market.
Key Benefits of the Report
COVID-19 Scenario Analysis
Questions Answered in the Commercial Paper Market Research Report  Â
Commercial Paper Market Report Highlights
Aspects | Details |
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By End User |
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By Region |
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Key Market Players | Crystal Financial, LQD Business Finance, LSQ Funding Group L.C., Porter Capital Corporation, White Oak Global Advisors LLC, Universal Funding Corporation, Capital Funding Solutions Inc., SLR Business Credit, Action Capital, First Capital Federal Credit Union |
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