A capital investment involves plowing funds into a business in order to assist in its expansion. The funds are directed at the acquisition or construction of fixed assets that are expected to be used over a prolonged period of time, though some portion of the funds may be needed to increase the available level of working capital.
Capital investment can take the form of debt, equity, or a mix of the two. It can come from a variety of sources, including angel investors, venture capitalists, lenders, and public offerings of securities. The amount of capital investment is usually planned for well in advance through the annual budgeting process, though smaller investment amounts may be allowed at the local level with little advance warning, in order to respond more quickly to local conditions.