Why do many big companies use commercial paper rather than short-term bank loans?

1. Commercial paper is issued by financially strong corporations, so investors accept a lower yield on it. 2. The interest rate on it is usually 1 to 3 percent below bank rates. 3. That saving is why many big companies use it instead of short-term bank loans. 4. It is still debt with a stated maturity, so the claim that it never has to be repaid inverts the instrument entirely. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.3 Obtaining Short-Term Financing_