Define the pros and cons of commercial paper, Financial Management

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What are the pros and cons of commercial paper relative to bank loans for a company seeking short-term financing?

Commercial paper is generally a cheaper source of short-term financing for a firm, as compared to bank loans. As well, a larger amount of funds can frequently be raised by issuing commercial paper. Bank loans are generally a more flexible source of short-term financing and establishing an on-going business relationship along with a bank may show beneficial while money is tight.

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