What type of capital is provided by a company's owners?

Equity capital is the type of capital that is provided by a company's owners, often referred to as shareholders. When owners invest their money into the business in exchange for ownership shares, they are essentially providing equity capital. This can include initial investments as well as any additional capital raised through issuing more stock.

Equity reflects ownership interest in the company and comes with a claim on the company’s assets and earnings. Unlike debt capital, which must be repaid at a specified time and often comes with interest payments, equity capital does not have to be returned in the same manner. Instead, equity investors typically benefit from the company’s growth through capital appreciation and dividends.

Other forms of capital, such as unsecured, credit, and debt, refer to financial resources that typically involve obligations or liabilities to pay back with interest, in contrast to equity, which represents ownership without a formal obligation to repay.