What is Undercapitalization?
Undercapitalization occurs when a business does not have the proper working capital to run their normal business operations and pay creditors. When a company is not maintaining the proper amount of cash flow to operate their business and loss the ability to access credit they increase their chances of bankruptcy. Funding such as invoice factoring can be a cash flow solution for undercapitalized companies.
Audio Definition/Pronunciation
OTHER TERMS BEGINNING WITH "U"
- Unbilled A/R
Unbilled A/R is an Asset account on the balance sheet that represents amounts recognized as revenue for which invoices have not yet been sent. This can occur when you invoice in arrears or have any delay in billing relative to…
- Uniform Commercial Code (UCC) Filing
A Uniform Commercial Code (UCC) Filing is a legal public notice that the creditor's files (i.e., banks, ABL’s and factoring companies) to disclose that it has an interest in the assets of a debtor. A UCC-1 financing statement (an abbreviation…
- Upfront Fees
Legitimate finance companies and intermediaries will not ask for an upfront fee. A due diligence fee on the execution of the funding proposal from a reputable finance source (not a broker or intermediary) is customary to cover some of the…
- US Govt Departments
See A-Z Index of U.S. Government Departments and Agencies.
- US Small Business Administration (SBA)
The US Small Business Administration (SBA) was created by the US government to provide small businesses with loans, loan guarantees, contracts, counseling sessions and other forms of small business assistance. The SBA also gives small businesses the opportunity to bid…
