You must read our free lectures notes and watch the lectures that go with them (and if needed the relevant F9 lectures, because certainly single-period capital rationing is revision of Paper F9 and understanding of single period rationing is important to understand multi-period rationing).
I am sorry, but you cannot expect me to type out all of our free lecture notes and free lectures here 🙂
Capital rationing is where there is limited cash available for investment, which can be due to either external reasons (hard capital rationing) or internal reasons (soft capital rationing).