Meaning of Leveraged lease/leasing. What is Leveraged lease/leasing ? - NEPAL MONETARY SOLUTIONS (NMS)

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Sunday, May 7, 2017

Meaning of Leveraged lease/leasing. What is Leveraged lease/leasing ?

It is not possible to purchase all the asset from a single person/entity. So, there may be a situation where there may be more than one owner of the asset due to lack of required fund by specific individual/entity.

In few cases of financial leasing/lease, the lessor may not be a single entity/individual who purchases the asset solely.

There may be a situation where a group of equity participants exists, and the team borrows a significant amount of fund from financial institutions to purchase the asset to be leased because the price/cost of the asset may be too high to afford by single entity/individual. Such transaction in which there is more than one owner of the asset is called 'Leveraged lease.'

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