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".


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.