What is a capital asset?

Capital assets are significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art. For businesses, a capital asset is an asset with a useful life longer than a year that is not intended for sale in the regular course of the business's operation. This also makes it a type of production cost.

What is asset financing?

Asset financing is usually used to cover a short-term need for working capital. Some companies prefer to use asset financing in place of traditional financing as the financing is based on the assets themselves rather than the bank's perception of the company's creditworthiness and future business prospects.

What are examples of capital assets?

For example, Company XYZ might own a factory building on three acres of land, and the factory might be full of expensive equipment. The building, the land, and the equipment are all usually considered capital assets. Construction in progress, trademarks, patents, copyrights, vehicles, intellectual property, and art can also count.