Financial capital

In brief, financial capital is money used by entrepreneurs and businesses to buy what they need to make their products (or provide their services).

Financial capital refers to the funds provided by lenders (and investors) to businesses to purchase real capital like equipment for producing goods/services. Real capital may include shovels for gravediggers, sewing machines for tailors, or machinery for manufacturing firms. Financial capital is provided by lenders for a price: interest. Also see time value of money for a more detailed description of how financial capital may be analyzed.

Furthermore, financial capital , or economic capital , is any liquid medium or mechanism that represents wealth , or other styles of capital. It is, however, usually purchasing power in the form of money available for the production or purchasing of goods, etcetera. Capital can also be obtained by producing more than what is immediately required and saving the surplus.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Fiancial Capital".