negative cash flow

(redirected from Negative Cash Flows)

Negative cash flow

Occurs when spending in a business is greater than earnings.

Negative Cash Flow

A situation in which a company is spending more money than it is receiving. While this is common in many companies, especially in the first year or two of operation, it is obviously unsustainable in the long-term. A company with a negative cash flow often has to resort to loans or equity financing in order to keep its doors open.

negative cash flow

Having insufficient cash to pay all operating expenses of a business or an investment.The situation is common with new developments and is solved by the developer using its own money to help pay bills or, more often, by borrowing enough money in the development loan to cover cash shortfalls until the project reaches stabilized occupancy and the break-even point.
References in periodicals archive ?
Negative cash flows can create a need for capital calls.
During that critical fill-up period, the project may experience cumulative negative cash flows of perhaps $500,000.
When the limited partners purchased the partnership interest, the general partners had agreed to purchase all unsold limited partnership interests and to fund any negative cash flows.
He also has 400 apartments all over the Upper East Side with negative cash flows of approximately $4003 per unit per month.