Backup Line

Think: backup line of credit. A backup line is a line of credit used by a bank to cover any issue of commercial paper that does not have financing. Commercial paper is an unsecured (not backed by collateral), short-term (usually less than 270 days) debt instrument issued by a corporation. It is basically a money-market account. So, in short, a backup line is a secondary source of funding (liquidity) for a corporation.