Leviable refers to something that is capable of being assessed or seized. For instance, when someone commits an offence, they may be subject to a fine that can be levied upon them. Additionally, as part of a judgement, goods can be seized.
A leveraged lease involves the lessor borrowing money from a third party to buy an asset, which is then leased to the lessee for a rental payment. The rental payments are used by the lessor to repay the loan and make a profit. For instance, a financial institution acts as the lessor and borrows money from a bank to purchase equipment for a company’s manufacturing plant. The equipment is then leased to the company, and the rental payments are used to repay the loan and generate a profit. This example demonstrates how a leveraged lease enables the lessor to finance the asset purchase without using their own funds and earn a profit through leasing.
A leveraged lease is a type of lease agreement where the lessor (the party who owns the asset) borrows a significant portion of the funds required to purchase the asset from a third-party lender. The lessee (the party who uses the asset) then makes lease payments to the lessor, who in turn uses those payments to repay the lender.
Leveraged leases can provide several benefits, such as allowing the lessee to use an asset without having to purchase it outright, providing potential tax advantages, and allowing the lessor to earn income from the lease payments and potentially profit from the sale of the asset at the end of the lease term.
Leveraged leases are commonly used for high-value assets such as aircraft, ships, real estate properties, and heavy machinery.
One of the main risks of a leveraged lease is the potential for default on the lease payments, which could result in financial losses for both the lessor and the lender. Additionally, changes in interest rates, asset values, or market conditions can also impact the profitability of the lease.
Leveraged leases are subject to various legal requirements and regulations, including those related to tax treatment, accounting standards, and financing arrangements. It is important to consult with legal and financial professionals to ensure compliance with these requirements.
The terms and conditions of a leveraged lease agreement typically outline the circumstances under which early termination is allowed. However, early termination may involve penalties or additional costs, so it is important to review the lease agreement carefully before considering termination.
In some leveraged lease agreements, the lessee may have the option to purchase the asset at the end of the lease term. The terms and conditions for the purchase, including the purchase price and any applicable fees, should be specified in the lease agreement.
If the asset depreciates in value during the lease term, it may impact the financial position of the lessor and the lender. The lease agreement may include provisions to address such situations, such as adjustments to lease payments or the option to terminate the lease.
The ability of the lessor to sell the asset during the lease term depends on the terms and conditions specified in the lease agreement. Some agreements may allow the lessor to sell the asset, while others may restrict such actions.
If the lessee defaults on the lease payments, the lessor may have the right to take legal action to recover the outstanding payments or repossess the asset. The specific remedies available to the lessor will depend on the terms of the lease agreement and applicable laws.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/leveraged-lease/
- Modern Language Association (MLA):Leveraged Lease. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/leveraged-lease/.
- Chicago Manual of Style (CMS):Leveraged Lease. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/leveraged-lease/ (accessed: May 09 2024).
- American Psychological Association (APA):Leveraged Lease. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/leveraged-lease/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts