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.

Bailouts have traditionally occurred in industries or businesses that may be perceived as no longer being viable, or are just sustaining huge losses. Typically, these companies employ a large number of people, leading some people to believe that the economy would be unable to sustain such a huge jump in unemployment if the business folded.

For example, Chrysler, a large U.S. automaker was in need of a bailout in the early 1980s. The U.S. government stepped in and offered roughly $1.2 billion to the failing company. Chrysler was able to pay the entire bailout back, and is currently a profitable firm.

One of the biggest bailouts is the one proposed by the U.S. government in 2008 that will see $700 billion put toward bailing out various financial organizations and those affected by the credit crisis.

Investment dictionary. . 2012.

Look at other dictionaries:

  • bailout — UK US /ˈbeɪlaʊt/ noun [C, usually singular] ► ECONOMICS, FINANCE a loan or other financial support that is given to a person, company, or country to help them when they are in financial difficulties: »A government spokesman claimed that the… …   Financial and business terms

  • bailout — n. Financial assistance to an ailing business to save it from failure. v. bail out The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008. bailout …   Law dictionary

  • bailout — (n.) 1945, in aviation, from BAIL (Cf. bail) (v.) + OUT (Cf. out). As federal help for private business in trouble, from 1968 …   Etymology dictionary

  • bailout — [bāl′out΄] n. [see BAIL1, vt. 3] 1. a helping out of one in difficulty ☆ 2. a providing of government financial aid to a failing company, city, etc …   English World dictionary

  • Bailout — For other uses of the term, see Bailout (disambiguation). In economics, a bailout is an act of loaning or giving capital to an entity (a company, a country, or an individual) that is in danger of failing, in an attempt to save it from bankruptcy …   Wikipedia

  • bailout — Various procedures whereby the owners of an entity can obtain its profits with favorable tax consequences. With corporations, for example, the bail out of corporate profits without dividend consequences might be the desired objective. The… …   Black's law dictionary

  • bailout — /bayl owt /, n. 1. the act of parachuting from an aircraft, esp. to escape a crash, fire, etc. 2. an instance of coming to the rescue, esp. financially: a government bailout of a large company. 3. an alternative, additional choice, or the like:… …   Universalium

  • bailout — UK [ˈbeɪlaʊt] / US [ˈbeɪlˌaʊt] noun [countable] Word forms bailout : singular bailout plural bailouts mainly American money that someone gives or lends to a person or organization with financial problems …   English dictionary

  • Bailout — Das Wort Bail out (auch Bailout, Bail Out) bezeichnet: Bail out (Wirtschaft), die Schuldenübernahme und Tilgung durch Dritte Bail out (Internet), eine Messgröße des Web Publishing Bail out (Luftfahrt), einen Begriff der militärischen Luftfahrt …   Deutsch Wikipedia

  • bailout — noun /ˈbeɪlˌawt/ a) a rescue, especially a financial rescue The government bailout of that corporation is going to cost the taxpayers a hundred billion dollars. b) a backup supply of air in scuba diving See Also …   Wiktionary

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