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What is Capital?

Capital (Definition)

Capital is the money a business has that is used for daily operations, and future growth. It is an important part of starting and running a successful business and essentially, it is the money and resources a business needs to make the products or services it sells. Capital is mostly defined as cash or liquid assets that are held for the purpose of making purchases. Capital can also refer to any business assets of dollar value, such as equipment, real estate, and stock.

Working capital, debt, equity, and trading capital are the four main types of capital that a business may have. Working capital is the money it has available to pay its bills daily. Debt capital is money a business gets from borrowing through banks, credit cards, government loans, or family and friends. Equity capital can be private, public, or real estate. Private and public are generally stocks related, with public being listed on the stock exchange. Trading capital is the amount of money that an individual or a business can use to buy and sell different types of stocks and other things. It is typically related to those working in the finance industry.

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