Business capital refers to the financial assets needed for a business to produce the goods and/or services it offers to its customers. Capital is necessary for a business to maintain its operations.
Business capital refers to the financial assets needed for a business to produce the goods and/or services it offers to its customers. Capital is necessary for a business to maintain its operations.
Typically, business capital comes in either the form of equity or debt. Some businesses sell equity, an ownership portion of the company (or stock), in exchange for a financial investment. Others obtain capital through debt, which includes business loans and credit that the company must repay in the future (usually, with interest).
While business capital includes tangible items – like the assets owned by the company, including cash in the bank, real estate, inventory, and equipment – the definition is adaptable and can be applied to anything that can generate wealth for the company, including things like patents, brand names, and books of business. Basically, business capital is anything the company could sell to make money if needed. In the accounting world, business capital strictly refers to the value of the business according to its balance sheet. However, in marketing terms, business capital extends to public perception of the brand and other related intangibles like goodwill.
