Capital Injection

DEFINITION of 'Capital Injection'

An investment of capital generally in the form of cash or equity - and rarely, assets - into a company or institution. The word "injection" connotes that the company or institution into which capital is being invested may be floundering or in some distress, although it is not uncommon for the term to also refer to investments made in a start-up or new company.

BREAKING DOWN 'Capital Injection'

Capital injections in the private sector are usually made in exchange for an equity stake in the company into which capital is being injected. However, governments may make capital injections into struggling sectors to assist in their stabilization in the larger public interest; in such cases, a government may or may not negotiate an equity stake in recipient companies or institutions.

Following the unprecedented financial crisis of 2008, the U.S. government - as well as a number of other governments around the world - injected hundreds of billions of dollars into their financial sectors in an attempt to halt the conflagration that was threatening to engulf the global economy.

RELATED TERMS
  1. Financial Stability Plan (FSP)

    A plan unveiled by the Obama administration in April, 2009, that ...
  2. Credit Crisis

    A crisis that occurs when several financial institutions issue ...
  3. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  4. Troubled Asset Relief Program - ...

    A government program created for the establishment and management ...
  5. Seed Capital

    The initial capital used to start a business. Seed capital often ...
  6. Sector

    1. An area of the economy in which businesses share the same ...
Related Articles
  1. Insurance

    Liquidity And Toxicity: Will TARP Fix The Financial System?

    TARP is the government's attempt to forestall a deep, extended recession. Will it work?
  2. Bonds & Fixed Income

    Bailout Acronyms 101

    The subprime meltdown gave rise to a mouthful of financial acronyms. Learn how to sort through this alphabet soup.
  3. Active Trading Fundamentals

    The Fall Of The Market In The Fall Of 2008

    How did America's strong economy tumble so quickly? Find out here.
  4. Term

    The History and Purpose of TQM

    Total quality management explores processes to enhance quality and productivity.
  5. Investing News

    How Does Slack Work and Make Money?

    This on the rise Unicorn is an enterprise chat platform that aims to integrate all aspects of your work life on one simple interface.
  6. Stock Analysis

    Uber: An IPO Candidate in 2016?

    Find out the reasons why massively successful Uber Technologies, Inc. may be a candidate for an initial public offering (IPO) in 2016.
  7. Budgeting

    Tools for Finding the Right Loan or Grant for Your Small Business

    Learn more about some of the best tools, resources and organizations available to connect small business owners with business funding opportunities.
  8. Term

    Series A Financing to Grow a New Business

    New businesses acquire Series A financing from external investors after receiving seed capital.
  9. Term

    Series B Financing to Expand Business

    Businesses acquire Series B financing from private equity investors or venture capitalists after two earlier rounds of financing.
  10. Term

    What's an Incumbency Certificate?

    An incumbency certificate lists an organization’s incumbent directors and officers.
RELATED FAQS
  1. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  2. Do hedge funds invest in private companies?

    Hedge funds normally do not invest in private companies because of liquidity concerns. Capital funding for private companies ... Read Full Answer >>
  3. Who do hedge funds lend money to?

    Many traditional lenders and banks are failing to provide loans. In their absence, hedge funds have begun to fill the gap. ... Read Full Answer >>
  4. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  5. What is the difference between a Debit Order and a Standard Order in a bank reconciliation?

    While both debit orders and standard orders represent recurring transactions that must be considered in bank reconciliations, ... Read Full Answer >>
  6. How can a company execute a tax-free spin-off?

    The two commonly used methods for doing a tax-free spinoff are either to distribute shares of the spinoff company to existing ... Read Full Answer >>
Hot Definitions
  1. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  2. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  3. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  4. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
Trading Center