Organisations are required to have a constant flow of working capital to effectively fund ongoing projects, using a sustainable financing approach. Working capital is a daily necessity, as cash is often needed to pay for project costs and acquire key materials to execute. However, when some organisations are low on working capital, they begin to consider several options on how to access funding for the type and size of business they run. Recently, raising funds through commercial papers is considered an attractive option for organisations who need short-term funding specifically for targeted projects.
In terms of viability, CPs prove a very effective and reliable way to grow an economy. By financing such projects across different industries such as real estate, agriculture, information technology etc, projects can be effectively executed which adds to the overall growth of that particular industry.
Also, very important insight into CPs which organisations must be aware of to help in the decision making on whether to issue CPs is that they are a liquid asset. What this means is that these CPs can easily be traded, without the loss of its value; and also has relatively lower risk when compared to other debt instruments.
Commercial Papers are here to stay and increase the future of short-term funding for businesses, who need support to finance day-to-day operations. It offers relatively higher returns, a shorter maturity period, high liquidity, and the commitment of regulators to protect investors’ interest.
Find out more on Fbnquest.com/merchantbank for a step by step process on how CPs can be fully maximised for your organisation.