Definition
- Financial capital
- Financial capital is money raised through loans and equity investments, which pays for inputs and produces nothing by itself.
- Not to be confused with: Factors of production
- Factors of production are the inputs, grouped as land, labour, capital and enterprise, that a firm combines to produce goods and services.
Test yourself
What is the difference between financial capital and factors of production?
Factors of production make things; financial capital is money that pays for them and makes nothing.