What is capital in business?

Capital in Business

Capital in business refers to the sum of financial assets required to produce the goods or services it offers to its customers.

The funds can be used to initiate business operations, meet the daily operational expenses or even to grow and expand into a larger setup.

Business capital is broadly of three types:

1. Seed Capital
Seed capital, also known as seed funding, is the initial investment required to establish a business. Expenses include the purchase or lease of work premises, buying necessary equipment and setup factory/ work space infrastructure.

2. Working Capital
Working capital is the funds required to meet the day-to-day expenses of a business such as premise’s rent, utility bills, employee salaries, raw material procurement, administrative expenses, etc.

3. Growth Capital
Funds required and used by a business to expand its operations is the growth capital. Also commonly known as the expansion capital, these funds are used for both expansion as well as sustenance of business operations during the process.

Businesses can also acquire capital either via equity or debt. Equity capital is the fund a business receives by selling its stock. Debt capital is the fund a firm avails as credit from a financial institution.

You can avail debt financing in the form of Business Loans from Bajaj Finserv and get up to Rs. 45 lakh.

Also Read: Funding options to raise capital for your business