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LFinance glossary

Leverage

Quick definition

Using borrowed money to boost returns.

Overview

Leverage is a financial strategy that uses debt to increase the potential return on invested capital.

Common Use Cases

Financing high-potential investments.
Improving return on investment.
Accelerating the company's growth.
Optimising the capital structure.

Examples in Small Businesses

Borrowing to expand operations.
Investing in new technology with a loan.
Maximising the profits of a specific project.

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