What is a 'Bailout'?

A bailout is an injection of money from a business, individual, or government into a failing company to prevent its demise and the ensuing consequences. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Bailout A bailout is when a business, an individual, or a government provides money and/or resources (also known as a capital injection) to a failing company. These actions help to prevent the consequences of that business's potential downfall which may include bankruptcy and default on its financial obligations. Businesses and governments may receive a bailout which may take the form of a loan, the purchasing of bonds, stocks or cash infusions, and may require the recused party to reimburse the support, depending upon the terms. Read More » Related to "Bailout" What's in the $2 Trillion Coronavirus Stimulus Bill What's in the $2 trillion coronavirus stimulus bill and how it will impact industries, investors, small businesses, and the financial sector. Read More » Fannie Mae, Freddie Mac, and the 2008 Credit Crisis What was the extent to which Fannie Mae, Freddie Mac, and their allies in Congress contributed to the largest economic crisis since the Great Depression? Read More » US Treasury vs. Federal Reserve: What's the Difference? Find out how the U.S. Treasury and Federal Reserve create policies to manage the economy and keep it on an even keel. Read More » SPONSORED BY SMARTASSET Financial Advisor Mistakes to Avoid Choosing a financial advisor is a major decision that can determine your financial trajectory for years to come. SmartAsset offers tips on common mistakes to avoid. Learn More » Related Definitions Capital Injection A capital injection is an investment in a company that can be offered for a variety of purposes and structured through cash, equity, or debt. Read More » Loan A loan is money, property, or other material goods given to another party in exchange for future repayment of the loan value amount with interest. Read More » Bankruptcy Bankruptcy is the legal proceeding involving a person or business that is unable to repay outstanding debts. Read More » Financial Crisis A financial crisis is a situation where the value of assets drop rapidly and is often triggered by a panic or a run on banks. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy