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Definition of 'Deficiency Agreement'
An arrangement in which a party provides a firm with funds to cover any shortfalls arising from capital or cash flow restraints, allowing the company to service its debt. A deficiency agreement will usually have a cumulative limit specified by the lending party.
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Investopedia explains 'Deficiency Agreement'
Deficiency agreements allow firms to avoid the possibility of default during difficult periods. These types of agreements will usually involve parties that have an interest in the company and want to see it continue operations.
While a deficiency agreement will cover an entire company, it may be specified to protect a smaller aspect of the business. For example, a new project may have unstable cash flows and be unable to generate revenues until it reaches a certain level of operations. To prevent the project from failing, a deficiency agreement could provide it with enough cash until a revenue steam is established.
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Search results for 'Deficiency Agreement'
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http://financialedge.investopedia.com/financial-edge/0911/5-Ways-To-Avoid-Foreclosure.aspx
... be enough to pay out the mortgage, otherwise you will have a deficiency and still
owe ... A forbearance is an agreement between you and the lender that gives you a ...
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http://www.investopedia.com/articles/retirement/07/5yearstoretirement.asp
... egg each year, will that be sufficient to make up for the financial deficiency? ... are
realistic, talk to your retirement advisor and come to an agreement as to ...
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http://www.investopedia.com/articles/tax/09/appeal-your-audit.asp
... 870, "Waiver of Restrictions on Assessment and Collection t of Deficiency in Tax". ...
that the numbers on the form correlate with the verbal agreement you reached ...
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