What Is A Bailout
1.Excessive selling of a firm's stock by its stockholders, perceived as a lack of their confidence in the profitability or viability of the firm.
2.To provide emergency financial help to keep a firm afloat.
The provision of financial help or liquidity to a corporation that otherwise would be on the brink of failure or bankruptcy
of, pertaining to, or consisting of means for relieving an emergency situation
The most certain thing about any business is the fact that it can never have a linear profile. It is always doing good or going through periods of recession, it always travels in a sine wave pattern even the growth is like that. You may have a positive trend in growth but there are times of slow growth or even negative growth for every business.
There may be a time where your business suffering from repeated downward growth can create problems with your cash flow such that there may be a point where running the business might become really difficult and until you get some more financing and fresh input of liquid money into it to keep it running.
Definition of “BAILOUT”
A situation in which a business, individual or government offers money to a failing business in order to prevent the consequences that arise from a business's downfall. Bailouts can take the form of loans, bonds, stocks or cash. They may or may not require reimbursement.
A Government Bailout
A situation in which a government pays or lends money to save a company or industry from failing. Normally government bailout plans are meant for very large corporations or big players in industry. The way it works is that the financial planners calculate the impact if such a big industry goes out of business then thousands of people will lose their jobs and the implications of that will be huge on the economy. So if they think that by helping the business with some liquid cash can make it come out of the situation then may be its better for the government to support it as otherwise if they go out it will be even bigger burden then the bailout itself.
A Personal Debt Bailout
Many people in their life reach a point where they have accumulated such amount of debt which is just almost impossible to pay back. Could be because of many reasons, lack of financial planning, bad spending habits or just unforeseen issues that you could not even think of when you took that loan to start your business or pay for something that you thought you would be able to payback and manage before it got out of you control.
Most of the people tend to opt for a personal debt bailout plan in which you reach an agreement with your creditors where you are required to pay only small amount of your debt could be as low as up to 30% of the debt and that also in smaller monthly payments so that you can manage your finances and after you payoff that smaller amount you can have a fresh start with your credit and build your score again to be able to achieve financial stability.