Undercapitalized

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Undercapitalized

A business has insufficient capital to carry out its normal functions.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Undercapitalized

Describing a company that has insufficient capital to maintain operations without outside assistance. Undercapitalized companies often rely on short-term loans for funding, though they may issue stock or bonds at some point to raise capital.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

undercapitalized

Of, relating to, or being a firm that has insufficient long-term equity to support its assets. A rapidly growing company that finds itself financing its operations primarily with short-term loans may be undercapitalized.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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But a portion of the court's opinion discussed the circumstances in which "[s]hareholder loans may be deemed capital contributions." (59) The court identified such two circumstances: "where the trustee proves initial undercapitalization or where the trustee proves that the loans were made when no other disinterested lender would have extended credit." (60) Based on this test, the court determined that the trustee had not carried his burden and, therefore, Estes' claim was allowed, albeit as a subordinated debt.
The following discussion will look at the three major factors consistently cited by the courts for piercing the LLC veil: 1) misrepresentation, 2) undercapitalization, and 3) instrumentality.
"This can cause excruciating delays in opening a business, which leads to a lack of cash flow, and then undercapitalization comes into play," Perrone said.
"Temporary bailouts" create an incentive for supervisors to treat an insolvent bank as one that is simply "undercapitalized." Undercapitalization becomes a form of illiquidity.
Both Henry, a construction industry veteran, and Boynton knew that a lot of pub ventures floundered due to undercapitalization, but they leveraged support through a multi-faceted approach of presales and crowdfunding, which led to a community loan for creating jobs.
Having the candidate start out underfunded One of the leading causes of franchise failure is undercapitalization or insufficient funding.
Undercapitalization is a top reason for business failure.
Despite the warning signs, many claims professionals were known for pushing the use of ELNY annuities to save money, even as ELNY's undercapitalization became too obvious to ignore.
(19) Our dependent variable is LLP, and the test variables are Level Two scaled by Level One (L2) and Level Three scaled by Level One (L3) fair value measurements and their interaction with the earnings variable (EBTP) and undercapitalization indicator variable (UCAPD).
Undercapitalization was evident in the failures of both commercial banks--Washington Mutual, Wachovia--and investment banks--Lehman, Bear Stearns.
Yet, despite the fact that African-Americans have occupied the theatrical landscape for more than 200 years, professionals of color still suffer from under-representation and undercapitalization. "On one hand, there's been progress," says Michael D.