leveraged finance

Leveraged finance refers to borrowing money, usually through loans or bonds, to fund acquisitions, growth, or other corporate needs. This borrowing involves higher risk because it’s often used by companies with substantial debt levels or lower credit ratings. To compensate for this risk, lenders or investors demand higher interest rates. Despite the risk, leveraged finance can enable companies to access larger sums of capital quickly, potentially boosting growth and profitability. It’s a specialized area of finance that balances risk and reward, involving complex credit analysis and financial structuring.