Tight Money

DEFINITION of 'Tight Money'

A situation in which money or loans are very difficult to obtain in a given country. If you do have the opportunity to secure a loan, then interest rates are usually extremely high. Also known as "dear money".

BREAKING DOWN 'Tight Money'

When there are tight money conditions in the business world, capital is scarcer than usual and therefore commands a higher price. Firms tend to have a harder time obtaining loans and financing expansions in tight money conditions and tend to pay higher than normal interest rates if they are successful in obtaining funds.

RELATED TERMS
  1. Monetary Policy

    Monetary policy is the actions of a central bank, currency board ...
  2. Cheap Money

    A loan or credit with a low interest rate, or the setting of ...
  3. Money Supply

    The entire stock of currency and other liquid instruments in ...
  4. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  5. Dear Money

    A situation in which money or loans are very difficult to obtain ...
  6. Loan

    The act of giving money, property or other material goods to ...
Related Articles
  1. Economics

    What Is Money?

    It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created?
  2. Economics

    The Federal Reserve

    Few organizations can move the market like the Federal Reserve. As an investor, it's important to understand exactly what the Fed does and how it influences the economy.
  3. Economics

    How Can Companies Increase Market Share?

    Companies that increase their market share enjoy a competitive advantage. They receive better prices from suppliers, and they’re able to produce goods faster.
  4. Entrepreneurship

    Up-to-Six-Figure Loans a Business Can Get – Fast

    The banking industry has invested a lot of money into shortening loan approval times from a few weeks to a few minutes, but should you dive in?
  5. Economics

    Understanding Capital

    Capital has a variety of meanings, but it generally refers to financial resources.
  6. Economics

    Calculating Economic Profit

    Economic profit is the difference between the revenue a firm earns from sales and the firm’s total opportunity costs.
  7. Economics

    Explaining Cost Of Capital

    Cost of capital is the cost of funds used to finance a business.
  8. Economics

    Where Does the Term "Black Friday" Come From?

    The term Black Friday can be used in a couple of different contexts; one positive and one negative.
  9. Economics

    What is Right of First Refusal?

    The right of first refusal is a contract in which a seller grants another party the right to enter into a business transaction before anyone else.
  10. Economics

    What are Business Activities?

    Business activities are any actions in which a company engages to make a profit.
RELATED FAQS
  1. Do working capital funds expire?

    Find out how and why a company's working capital can change over time, though the fund does not actually expire, and how ... Read Answer >>
  2. Does working capital include inventory?

    Learn about inventory that is part of current assets and working capital, which is the difference between current assets ... Read Answer >>
  3. How can I calculate funds from operation in Excel?

    Understand how the terms ''work in progress'' and ''work in process'' are used interchangeably to refer to items in the middle ... Read Answer >>
  4. When does Q4 start and finish?

    Learn about different financial years used by various companies. Explore when the fourth quarter begins on October 1st and ... Read Answer >>
  5. When is it useful to look at a company's fixed asset turnover ratio?

    Understand when it is useful to look at a company's fixed asset turnover ratio, and learn which industries are best suited ... Read Answer >>
  6. What is the difference between perfect and imperfect competition?

    Learn the differences between perfect competition and imperfect competition and what types of markets are considered imperfectly ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center