What is CAPEX?
Short for capital expense, CAPEX refers to any capital expenditures that are used to acquire physical assets. The assets acquired as a result of this capital spending may be in the form of property such as land or buildings, as well as equipment for an office or to set up a manufacturing floor. Along with being related to the acquisition of new assets, CAPEX can also be associated with the decision to upgrade physical assets by making improvements or otherwise refurbishing the property or equipment. Understanding the amount of CAPEX that is involved in acquiring these types of assets, or in refurbishing existing ones, can be very helpful when the task will require borrowing funds. Lenders often look at the actual amount of the capital expense involved, as well as whether the borrower wants to loan to purchase new equipment or to upgrade existing assets. Depending on the strategy, a lender may determine that lending money to upgrade outmoded equipment, or attempt to improve property tha
