What type of capital refers to the money needed to set up and sustain a business operation?

The type of capital that specifically refers to the money needed to set up and sustain a business operation is known as financial capital. This encompasses all funds that are used by the business to acquire its assets and finance its operations, including investments in buildings, technology, and raw materials. Financial capital is critical during the initial stages of a business when substantial investments are required to get the operations underway and maintain them over time.

In contrast, equity capital pertains specifically to funds raised by a company in exchange for shares of ownership, while operating capital is often more focused on the resources required for day-to-day functioning. Working capital, on the other hand, refers to the difference between current assets and current liabilities, and it is used to manage short-term cash flow needs. Each of these types of capital serves distinct purposes, but financial capital is the overarching term that covers the broader need for funds necessary to establish and run a business.