SOURCES OF CAPITAL 1
Sierra LeJeune
HCA 375
August 3, 2017
SOURCES OF CAPITAL 2
Sources of Capital
There are different sources of capital for profit companies. The common way by which profit
companies obtain capital is that they make a profit through the selling of products for more than it costs to
produce. Selling goods and services for a price higher than they were obtained earns a profit for the
company and thus increases the amount of capital that the corporation is worth. Secondly, like individuals,
companies can borrow money. Organizations can choose to borrow money through different means, either
privately through bank loans, or in other circumstances, openly by putting up a debt notice. The problem of
borrowing however is the interest which has to be paid to the lending cooperation. Additionally, an
organization can raise capital by leasing a section of it in terms of shares to investors; this type of funding is
known as equity funding. The advantage of this is that investors do not need interest payments as loaners do.
