No items found.
WEBINAR: Delete Your Sheets: How Subs Can Streamline Billing
Register Now →
By clicking “Accept All Cookies," you agree to let Siteline store cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.
Construction glossary

What is Equity?

Equity in the construction industry refers to the financial investment made by the stakeholders in a construction project. It's essentially the difference between the overall project cost and the amount borrowed to finance it. The capital is often fund supplied by owners, investors, or shareholders. These entities get a return on their investment either through project profits, or an increase in the value of the project, thus, equity provides them with ownership rights. Interestingly, a high equity stake in projects usually indicates low leverage and low financial risk. The construction industry relies heavily on equity, particularly during large-scale projects as these require substantial financial backing. Consequently, a contractor with a higher level of equity is often regarded as more stable and trustworthy.