Commercial Templates

General FAQs

• What is Termed as Commercial?

  The term commercial is used to refer to any sort of activity of commerce. It includes all the business, organizational, or other monetary exchanges in the market to earn a profit. Commercial banking is one of the best examples to define the term.

• What is a Commercial Contract?

  Commercial contracts are the documents of agreement between two parties that legally agree on some commercial factors and obligations towards each other. This is mostly used for regulating large business transactions. This contract can be verbal, written, or implied in an informal or formal method.

• What is a Commercial Paper?

  It is an unsecured debt instrument for a short term issued by a corporate house, agency, or business to pay for the short-term liabilities, inventories, and financing the accounts payable. Its maturity is limited to a maximum of 270 days. These papers are issued at discounts from its face value.

• What are the Benefits of Commercial Paper?

  • Commercial papers are not required to be registered with the SEC if it matures before 270 days or 9 months.
  • It is a cost-effective way of financing and payment. 
  • The range of maturity provides better flexibility. 
  • It does not assert any lien on the company assets. 

• What are the Disadvantages of Commercial Paper?

  • Only blue-chip companies can use this service. 
  • Issuing commercial paper reduces bank credit limits. 
  • To issue commercial paper, a high degree of control is required. 
  • Stand-by credit might become mandatory.