Learn · Explainer
Commercial paper
Short-term unsecured notes used to raise cash for weeks or months: program size, the year-end balance, and backup credit lines, with Apple, Bristol Myers Squibb and Lockheed Martin.
The short answer
Commercial paper is a short-term unsecured IOU a large company sells to investors, usually for a few days to a few months, to cover cash needs such as payroll, inventory or a dividend date. The 10-K states the size of the program, how much was outstanding at year end, and often that a revolving credit line sits behind the program as backup.
What it is
Unlike a 10-year bond, commercial paper is meant to be short. Bristol Myers Squibb's 10-K for 2025 says that under its program it may issue a maximum of $5.0 billion of unsecured notes with maturities of not more than 365 days from the date of issuance, and that it reduced that maximum from $7.0 billion in January 2025. During 2024 it issued and repaid $3.0 billion under the program.
The notes are unsecured: they are not backed by a specific asset. Investors buy them because the issuer is a large, frequent borrower and the term is short. Companies typically sell new paper to repay paper that is coming due, so the outstanding balance can move around during the year.
The year-end figure can be a quiet day
Apple's 10-K for fiscal 2026 says it issues unsecured short-term promissory notes under a commercial paper program and that, as of September 26, 2026, it had $2.0 billion of commercial paper outstanding, payable within 12 months. Lockheed Martin's 10-K for 2025 makes a point that matters for any year-end figure: the outstanding balance can fluctuate daily, and the amount outstanding during the period may be greater or less than the amount reported at the end of the period. Lockheed Martin had no commercial paper outstanding at year end in 2025 or 2024.
Source: Apple 10-K for fiscal 2026, filed Nov 3, 2026 · Bristol Myers Squibb 10-K for fiscal 2025, filed Feb 11, 2026 · Lockheed Martin 10-K for fiscal 2025, filed Jan 29, 2026
Backup credit lines
Many companies keep a revolving credit facility they can draw if the commercial paper market is unwilling to roll their notes. Bristol Myers Squibb says its facilities are used to provide backup liquidity for its commercial paper borrowings, and that no borrowings were outstanding under those facilities at December 31, 2025 or 2024. Procter & Gamble's 10-K says it maintains bank credit facilities to support its ongoing commercial paper program. The backup line is a safety net; it is not the same thing as paper actually outstanding.
Common questions
What is commercial paper?
A short-term unsecured note a company sells to investors, typically due in anywhere from a few days to 270 or 365 days, to raise cash for near-term needs.
How is it different from a corporate bond?
Bonds usually have terms of several years and often pay interest on a set schedule. Commercial paper is much shorter, is issued in a program rather than a single deal, and is often repaid by issuing new paper.
Why do companies keep a backup credit line?
If investors stop buying a company's paper, the company may need another way to repay notes that are coming due. The revolving facility is there for that case. Many large issuers report that the backup line is undrawn.
Why can the year-end balance be misleading?
As Lockheed Martin's 10-K notes, the outstanding balance can fluctuate daily. A company may have issued and repaid a large amount during the year even if little or nothing is outstanding on the balance-sheet date.
Where does commercial paper appear in the 10-K?
On the balance sheet in current liabilities, in the debt note, and often in the liquidity section of the MD&A, which states the program size and the backup facility.
Disclosures
- Editor holdings
- The editor holds no position in any company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 10, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
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