- (finance) Insufficient capitalization
under- +"Ž capitalization
undercapitalization - Investment & Finance Definition
A situation in which a business doesn’t have enough capital to successfully operate. Undercapitalized companies have too much debt. Under-capitalized companies need to be recapitalized, meaning that they need to have some of their debt obligations forgiven and get new injections of equity. If they aren’t recapitalized, they face bankruptcy.