Sometimes, loans and grants are not the only way in which money is invested in a company. Capital input is one scenario where new money is invested in the business that the owner can use to own a “piece” of the company. Naturally, the money invested will grow in value if the business is doing well and decline if the business is not.
For example…
As a proud, close friend of the director of Strong Coffee Roastery, Michael decides he wants to put some capital input into the business. He pays Jason, the owner of Strong Coffee Roastery fifty thousand dollars as capital input. This money is not seen as a loan but an investment into the business. Jason is free to use the money to grow the business and Michael can lay claim to a portion of the business.
