From Longman Business Dictionarycap and collarˌcap and ˈcollar noun [singular]1BANKING an agreement by a lender not to go above or below certain interest rates on a particular loanThe mortgage lenders have introduced a cap and collar deal with an upper rate of 7.75% and a floor of 5.99%.2FINANCE in a takeover, a maximum and minimum offer for sharesIts bid for the company includes a cap and collar designed to give investors a fixed price and a greater sense of security.
