VICE-chairman Chris Reeves admitted Poole Town's future would have been placed in jeopardy if the club had parted with the £80,000 necessary to boost their promotion bid.
Fifth-placed Dolphins have been told by the National League that they are not eligible to compete in the National South play-offs due to not having 500 seats under cover, a figure believed to be over and above Football Association ground-grading regulations.
Reeves confirmed Poole – who take on Hemel Hempstead tomorrow (3pm) – would appeal to the FA over the decision.
The club had already stumped up more than £170,000 to fund improvements just to stay at step two level, which they achieved following an inspection of the Black Gold Stadium at the end of last month.
And Reeves insists increasing spending to £250,000 would have been "a step too far".
He told the Daily Echo: "We pulled off an incredible achievement in meeting the ground-grading against the odds.
"We believed in ourselves and we did it. To get the extra seats was a step too far and could easily have bankrupted the club, so there comes a point where you have to let your head rule your heart.
"We had to make the decision months ago and at the time we didn't know we would be in the play-off places, or win the play-offs.
"It's a massive financial burden for a club, on top of operational costs, to find north of £250,000. You just can't do it.
"For all sorts of reasons, it simply wasn't practical for us to address the 500 seats upgrade. We have no facility for a Football Foundation grant as we only have eight years left on our lease and there has to be a minimum of 10.
"We always knew there was this risk but we will appeal it and see where we go. We have to take it as far as we can.
"I think it's an unsatisfactory rule. Bearing in mind all the financial constraints involved in running a club at this level, I think it's a very questionable regulation."
Darlington will not be allowed to take part in the National North play-offs because their Blackwell Meadows ground – which they share with Darlington RFC – does not have the required amount of covered seating.
Like Poole, the Quakers are set to appeal and have been in contact with the Dorset outfit over their predicament.