negative cash flow
Negative cash flow
Occurs when spending in a business is greater than earnings.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
negative cash flowHaving 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.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.