Finance companies essentially sell commercial paper and use the proceeds to make loans.

Name: Finance companies essentially sell commercial paper and use the proceeds to make loans.
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Question

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Finance companies issue commercial paper, which is a short-term debt instrument, and use the proceeds to fund their lending activities, such as providing consumer loans, commercial leases, and equipment financing. Therefore, they do sell commercial paper and make loans.

Finance Companies Essentially Sell Commercial Paper and Use the Proceeds