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What is a 'Backlog'

A backlog is a build-up of work that needs to be taken care of. The term "backlog" has a number of uses in finance. It may refer to a company's sales orders waiting to be filled or a stack of financial paperwork that needs to be processed, such as loan applications. When a public company has a backlog there can be implications for shareholders, because the backlog may have an impact on the company's future earnings, as the company is unable to meet demand. A backlog is generally something that companies want to avoid.

BREAKING DOWN 'Backlog'

The 2008 housing crisis resulted in a backlog of foreclosures in which lenders had a large inventory of residential properties that they needed to sell and get off the books. With homes going into foreclosure at a much faster rate than usual, lenders did not have the capacity to process all the foreclosures in a timely manner. Another example of a problematic backlog occurred in 2009 in England, when a high volume of college financial aid applications resulted in a backlog that prevented some aid determinations from being made in time for the start of the school year.

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