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leveraged lease

   Also found in: Wikipedia 0.04 sec.
Leveraged Lease
A lease agreement wherein the lessor, by borrowing funds from a lending institution, finances the purchase of the asset being leased.

Notes:
The lessor pays the lending institution back by way of the lease payments received from the lessee. Under the loan agreement, the debtor has rights to the asset and the lease payments if the lessor defaults.

Leveraged lease
A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset. The lender has a lien on the assets and a pledge of the lease payments to secure the borrowing.
leveraged lease
A long-term lease in which a major part of the purchase price of the to-be-leased asset is financed by a third party. Thus, the lessor uses a combination of its own funds and borrowed money in order to purchase the asset that is then leased to another party.
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? Mentioned in ? References in periodicals archive
 
FASB has issued a staff position that requires companies to recalculate their leveraged leases if there is a change in the timing of cash flows relating to income taxes generated by the leveraged lease.
Staff position issued on leveraged leases by California CPA
Using a structure known as a leveraged lease, cash-rich investors such as Burbank-based Disney purchased airplanes, individually or in a pool, and leased them out to air carriers.
Once seen as wise investment, Disney jets burden bottom line. (Up ... by Palazzo, Anthony / Los Angeles Business Journal
Simply put, a leveraged lease is a transaction where the lessor puts in a part (usually 20-40 percent) of the funds necessary to purchase the equipment and a third party lender supplies the remainder, hence the lessor's investment is leveraged with third party debt.
Leveraged leases a financing tool for the RE industry by LAKS, KENNETH B. / Real Estate Weekly
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