what are the risks associated with commercial paper 
even though the premise of commercial paper is a market with low risk participants the primary risk associated with commercial paper is still credit risk there will always be the possibility that the issuer may default on their repayment obligation since commercial paper is unsecured investors rely on the issuer s financial stability and credit rating the bottom linecommercial paper is unsecured debt with short terms up to 270 days issued by companies with high credit ratings it offers a less expensive way to raise money to pay short term expenses compared to getting a business loan commercial paper can also be attractive for issuers due to the low interest rate that s usually attached to it while that rate isn t always as appealing to investors it can be a higher return than that offered by some bonds such as treasuries plus it s an investment option that can help diversify portfolios investors in commercial paper are usually institutions rather than individuals due to the large minimum denominations involved commercial paper may be seen as a low risk investment due to the high credit rating preferred for issuers bear in mind however that like any other investment it involves some degree of risk 