What is Equity? Definition or Meaning

Equity refers to the value of an asset after taking out any liabilities the owner may have on it. This definition applies generally to financial assets, real estate, inventory and earnings. Equity can apply to intangible assets like brand identity, thus presented as “brand equity” or the value of a brand in comparison to a generic brand’s value.

For example…

Homeowners use their home’s equity to fund other projects, like a business. Let’s say you own a lovely beachfront home worth about one and a half million dollars. Let’s say you have a mortgage of three hundred thousand dollars on it. This means your home’s equity is one point three million dollars. This is the amount you could potentially borrow against your home to fund your new venture.