leveraged loan

leveraged loan definition - business

leveraged loan

Credit extended to a less-than-investment-grade borrower. For example, a bank provides a short-term loan to temporarily finance a corporate buyout, with repayment of the loan to take place when permanent financing is in place. Leveraged loans are relatively risky for the lender, who is compensated with a higher interest rate.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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