Financial Management: Core Concepts, Third Edition

15.6 Other Borrowing Options for a Mature Business

So far, we have looked at the mainstream financing of a business as it progresses through the business life cycle. Once a firm reaches a mature business stage, there are many other borrowing opportunities. We will take a look at two of those options: commercial paper and banker’s acceptances. We mentioned these concepts briefly in Chapter 12 and will look at them in more detail here.

One exception to the requirement of registering with the SEC is if the maturity of the issue is less than nine months, or 270 days. Many large companies are able to use their strong reputations to borrow directly from the public without going through the SEC approval process. One such way that companies can accomplish ...