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LSDefine
Simple English definitions for legal terms
leveraged lease
Read a random definition: read on
A quick definition of leveraged lease:
Leviable means something that can be assessed or seized. For example, a fine can be levied on someone who has committed an offense, and goods can be seized as part of a judgment.
A more thorough explanation:
Definition: A leveraged lease is a type of lease where the lessor (the owner of the asset) borrows money from a third party to finance the purchase of the asset, and then leases it to the lessee (the user of the asset) for a rental payment. The lessor uses the rental payments to repay the loan and earn a profit.
Example: A company wants to lease a new piece of equipment for their manufacturing plant. The lessor, who is a financial institution, borrows money from a bank to purchase the equipment and then leases it to the company for a monthly rental payment. The lessor uses the rental payments to repay the loan and earn a profit.
This example illustrates how a leveraged lease allows the lessor to finance the purchase of an asset without using their own funds, and earn a profit by leasing it to a lessee.