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What is a leveraged lease?
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25th Nov 2009 by Amelia Timbers
A leveraged lease is one financed by debt, or leverage. The term leveraged lease also normally involves an element of ownership- either intent to own, or a leased asset that is then purchased. An example of this are most homes purchased in the US- some equity is put down, usually 20%, and the rest is borrowed from a third party lender who is paid back over time and has the collateral of the home. Leveraged leases are also commonly used in firm's equipment leasing, where assets can require enormous capital to own.
A leveraged lease is one financed by debt, or leverage. The term leveraged lease also normally involves an element of ownership- either intent to own, or a leased asset that is then purchased. An example of this are most homes purchased in the US- some equity is put down, usually 20%, and the rest is borrowed from a third party lender who is paid back over time and has the collateral of the home. Leveraged leases are also commonly used in firm's equipment leasing, where assets can require enormous capital to own.
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17th Nov 2009 In Leasing
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Subjects: leveraged lease,