Business capital for retail traders is crucial. Without capital, no matter how big a business entity is, it will not be able to carry out its business operations effectively and productively. Recognizing the types and sources of capital will greatly assist business operations in obtaining the needed funding, especially for retail traders.
In general, types of business capital can be divided into two main categories, namely tangible and intangible. The difference between these two types of assets lies in the presence or absence of physical form in the capital. Capital that has a physical form is included in tangible capital, while business capital that does not have a physical form is included in intangible capital.
Tangible Business Capital
Tangible capital is capital or assets that have a physical form. In another sense, tangible capital can be interpreted as a business tool. Examples of assets that fall into this category include liquid funds, business premises, production, and distribution equipment.
Apart from having a physical form, another aspect of tangible business capital is its relatively long service life, generally more than one year. Tangible capital must also play an active role in business operational processes, both in production and distribution … Read More