Capital Call | Propertylogy

Capital Call

By on January 2, 2019

A capital call describes the request of a business for more equity funds from shareholders to meet short term cash shortfalls in operating costs and development.

The primary purpose is to plug a hole that could potentially result in liabilities exceeding assets.

When that happens, banks might be more reserved, share prices might fall, new investors might hold back, etc.

Often times, shareholders might simply refuse to provide additional funds for a project but receptive to the company offering new shares to a new partner who can promise that cash.

Other times, these are periods when power brokers try to get big companies to merge.


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