Legal Definitions - commodity paper

Commodity paper is a type of financial document that represents a loan secured by a bill of lading or warehouse receipt. It is a form of commercial paper, which is any written or printed document or instrument that serves as evidence of a debt.

For example, if a company needs to borrow money to purchase a shipment of goods, they may issue commodity paper to a lender. The paper would be backed by the bill of lading or warehouse receipt, which serves as collateral for the loan.

Commodity paper is different from other types of commercial paper, such as bearer paper or order paper, which have different payment terms and requirements.