Foam The Runway

It might sound like the hottest new dance craze, but foaming the runway is less about getting our groove on than it is about preventing financial disaster.

Back in the day...way back in time, like in the 1980s...if an airplane was coming in for an emergency landing, the runway would be sprayed with fire suppression foam in hopes it would help slow the plane down and keep sparks from the wheels from igniting the fuel stored in the wings. This foaming thing isn’t really done anymore, but the term has lived on. In the business world, “foaming the runway” refers to infusing a bunch of cash into a business in order to help prevent bad financial things from happening, like bankruptcy. Kind of financial life insurance.

It’s like moving money from our savings account to our checking account (or borrowing money from Mom) to cover an unexpected expense. In the long run, the extra cash might or might not keep us from going broke, but in the short term, we’ve averted a financial crisis.