The Multi-faceted Definition of Capital

Business capital consists of the financing which a business needs in order to produce the goods or services that it provides to customers, and is one of the most essential ingredients needed by a business in order to maintain operations.

Depending on your point of view, capital can have a slightly different meaning to many professionals in the business world.

Forms of business capital

The two primary forms of business capital are debt and equity. Some businesses are able to sell ownership portions of the company in the form of stock, in exchange for money invested by an individual, and this is considered equity. Capital can also be obtained through debt, which takes in all the credit or business loans which a company acquires, and must repay in the future.

The diverse meaning of capital

While most people generally think of capital in terms of tangible items such as company assets, cash reserves, equipment, inventory, and real estate, business capital can include a great many other things as well. Almost anything that generates wealth for the company can be considered part of its capital holdings.

This broad category will include things like brand names, patents, business books, and virtually anything else which could be sold by the company to generate some kind of income. As an accountant would see it, business capital only refers to the value of a company which appears on its balance sheet. In marketing terms though, business capital has a broader definition, and includes a number of intangibles like the public perception of the brand, and goodwill toward the company.

Does your company have the capital it needs? 

If not, we may be able to work with you, to provide the funding you need for daily operations or for continued business growth. Contact us at Commercial Capital Lending so our financial specialists can advise you of some options for obtaining that critical funding.

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