A request made by an SPV for additional capital from investors when the funds initially collected are insufficient to meet the obligations outlined in the asset acquisition or purchase document. If the required additional capital exceeds the current available funds but is still within the total subscribed capital, the SPV issues a capital call to obtain the remaining funds.
Example:
Investor Tim subscribes to contribute $1,000,000 to SPV X. The SPV Organizer initially collects 20% of the subscribed capital, so Investor Tim contributes $200,000. The remaining 80%, or $800,000, will be called for at future intervals through capital calls. Investor Tim is obligated to contribute the $800,000 upon receiving the capital call from the Organizer.
Note:
Many SPVs do not use capital calls, instead collecting 100% of the subscribed capital upfront to fund the entire asset acquisition.