What Is Capital Intensive?
Capital intensive refers to an endeavor or project that requires a great deal of capital to undertake. A project or business that is capital intensive often has much more risk, since a larger investment of cash or tangible assets is required. Generally, many businesses or projects that produce tangible goods require more capital than service businesses; although certain endeavors even within these businesses are more capital intensive than others. One example of an especially capital intensive business is a business that involves drilling for oil. Huge amounts of money must be spent to undergo such a product. Land or oil rights must be purchased, and drills, rigs and other expensive equipment must be bought. This requires a large expenditure of cash.
