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Note Brokers
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

Dealers or COMMERCIAL PAPER houses whose business it is to act as middlemen between the issuers of commercial paper and banks, insurance companies, and private investors, who constitute the market on the demand side.  Not brokerage firms are usually partnerships having ample capital resources, capital, and valuable bank connections to enable them to secure an adequate supply of funds to finance their transactions.  Commercial paper borrowing is a means of temporarily raising funds for financing seasonal inventory requirements.  Note brokers derive their profit by buying notes from the makers at one rate of discount and selling them at another, although some of the business may be done on the basis of a small commission that is charged by the borrower.

The paper marketed by note brokers is varied in character and includes single-name paper, double-name trade paper, collateral notes, and trade and bank acceptances.  Much of the paper dealt in by note brokers is single-name paper of well-known commercial houses.

A large portion of the paper is sold upon a ten days' option to give the proposed buyer an opportunity to investigate the standing of the maker.  At the end of the option period it may be retained or returned.  Note brokerage is a specialized machinery for facilitating commercial borrowing by prime credit risks in the open market.  

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