What is 'Capital Funding'

Capital funding is the money that lenders and equity holders provide to a business. A company's capital funding consists of both debt (bonds) and equity (stock). The business uses this money for operating capital. The bond and equity holders expect to earn a return on their investment in the form of interest, dividends and stock appreciation.

BREAKING DOWN 'Capital Funding'

Entire companies exist whose sole purpose is to provide capital funding. Such a company might specialize in funding a specific category of companies, such as healthcare companies, or a specific type of company, such as assisted living facilities. The capital funding company might also specialize in providing a certain type of funding, such as short-term financing, or it might provide financing of all types. It could also choose to focus on funding a certain stage of the business, such as its construction of a facility, or it might fund businesses at any stage. Venture capitalists are an example of those that provide capital funding.



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