Definitions



Capital categories definitions

Grant capital:
Capital that is given away under certain conditions.
Other related expressions are support, gift or donation.

Loan capital:
Capital that must be repaid with interest according to a defined time schedule.

Share capital:
Capital that gives ownership in a company.
Another expression for share capital is equity.

Guarantee capital:
Guarantee capital is a financial instrument that in some perspective reduces risk.
Examples of risk categories are political risk, currency risk, interest rate risk and payment risk.
Credit insurances are included in this category.

3rd party capital:
Capital that finances the buyer side in a project or a business deal.
Other related expressions are end customer capital or buyer capital.

Semi-forms:
In addition to these five main capital category definitions, there are semi-forms of these capital categories.
One example of a semi-form is a conditional loan, i.e. a loan that is converted to a grant, if the project is completed according to the rules and guidelines, defined by the public financing institution.
Another example of a semi-form is a convertible debenture, i.e. a loan that can be converted to share capital.