Asset-backed commercial paper

Asset-backed commercial paper is like a grown-up piggy bank. You know how you have a piggy bank at home where you put all your coins and dollars? Well, companies have piggy banks too, but they're called asset-backed commercial paper.

Companies put things like car loans, student loans, credit card debt, and other types of loans into their piggy bank. Then, they can sell little pieces of their piggy bank, otherwise known as asset-backed commercial paper, to people who want to invest their money.

Just like how you can take out a penny or a nickel from your piggy bank when you need it, companies can use the money they get from selling their asset-backed commercial paper to pay for things like buying new computers or paying employees.

Investors who buy the asset-backed commercial paper get paid back with interest, just like how your parents might give you interest when you save your money in your piggy bank.

Overall, asset-backed commercial paper is a way for companies to turn their loans into money and for people to invest their money and earn interest.