Capital Acquisition
Commerce is a divergent field where a single word might change its meaning with reference to the subject. Capital Acquisition is one among them. So let us make this very simple.
Capital is any asset that is available in hand in the form of money, goods, resource etc which can be used for the further production of assets. Acquisition means to acquire or possess. So capital acquisition in simple reference means to acquire the assets.
Where is it used?
Basically capital acquisition is found everywhere, where money flows.
- But the broad meaning is applied in the corporate In corporate acquisition one big company buys most of ownership from target Company either in the form of share or buy paying a premium on market price of company. This can be either hostile or friendly.
- In banking, capital acquisition means debt financing, which simply means loans. So when someone pay back loans with a interest debt financing is being used.
- In equity the company sells or exchange a part of ownership equaling the amount of capital.
Who is benefited?
Very simple, whoever is looking for expanding business can make use of this business tool. It doesn’t mind whether it’s a small scale owner or a corporate. In a simple example, Raj started a company which happened to be a huge success. But expanding business seems way out of hands for Raj, so he will sell his capital in exchange of asset for expansion.
