Definition for: Leveraged Lease
A "leveraged lease" is a lease where the lessor purchases the asset with part of the consideration for the purchase consisting of non-recourse debt. The lender's financing allows the lessor to purchase the asset with equity and debt financing (thus "leveraged"), and then lease the asset to a lessee. An example of a leveraged lease is where a lessor purchases large capital equipment, funding a portion of the purchase price with debt, and then simultaneously leases it to a company for its operations.
