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Buzzword: Commercial paper

Corporate America often relies on commercial paper to keep it going. But many issuers stopped producing these short-term loans when the subprime debaucle settled in.

Unfolding credit brings us this week’s Marketplace Money buzzword: Commercial paper.

That’s the name for the short-term loans which big corporations lend to other big corporations. They’re cheaper than bank loans, which makes them a good way to get a quick sheaf of cash. But the subprime crisis shredded the commercial paper biz. Issuers feared they wouldn’t get paid back for their paper, so they issued less of it.

According to a new report, though, corporations are starting to lend again, leading some to think the credit crunch is easing up. Maybe it’s possible to dig the economy out of the trash.

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