AIM Framework glossary
Surplus Capital
Canonical definition
Surplus Capital is capital held by a lender that, at the margin relevant to a lending decision, has no productive A-I deployment available to the lender: there is no forgone productive return whose legitimate PA and PI components would justify a large scalar "opportunity cost" on the full principal. The category is the one in which interest is most often charged and in which the opportunity-cost defence of interest is weakest.
Explanation
Money someone is not actually going to use to build or run a real business or project, but still lend out for a return. If they were not going to do anything productive with it, "I could have earned more elsewhere" often does not apply the way lenders claim.
Epistemic status
Framework-Specific Construct.
Derivation
Related terms
- Opportunity Cost (Decomposed)
- Mimetic Premium (PM)
- Price Decomposition. Deployment-alternative decomposition. The "no productive A-I deployment available" specification disaggregates into A-deployment opportunities (the lender forgoes meeting another's A-need) and I-deployment opportunities (the lender forgoes investing in another's I-capacity). The opportunity-cost defence of interest survives where genuine A-deployment alternatives exist
- survives differently where I-deployment alternatives exist
- and fails where neither exists
- leaving only PM-deployment alternatives
- in which case the interest charge is PM-extraction rather than legitimate compensation. See Opportunity Cost Decomposed for the formal PA-PI-P_M decomposition of forgone return