Cash deficiency agreement

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Cash deficiency agreement

An agreement to invest cash in a project to the extent required to cover any cash deficiency the project may experience.

Cash Deficiency Agreement

In project finance, especially construction, an agreement in which one party provides the other up to a certain amount so that the second party may temporarily alleviate its cash flow problems until it becomes profitable. This especially applies to a situation in which one or more of the second party's products are not selling as well as expected. This agreement allows the borrower to service its debt without risking default.
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