Hard capital rationing

Hard capital rationing

A capital budget that under no circumstances can be violated.

Hard Capital Rationing

A capital budget to which a company must adhere. A company may engage in hard capital rationing if it has limited resources and has allocated them in such a way as to allow little or no room for error. A project that goes over budget under hard capital rationing may land the company in trouble. See also: Capital rationing.
References in periodicals archive ?
The first is known as hard capital rationing, which exists when external finance providers (shareholders and lenders) refuse to provide the company with any extra money.