leverage

[lev-er-ij, lee-ver-]

noun

1. the action of a lever, a rigid bar that pivots about one point and that is used to move an object at a second point by a force applied at a third.

2. the mechanical advantage or power gained by using a lever.

3. power or ability to act or to influence people, events, decisions, etc.; sway.

   Being the only industry in town gave the company considerable leverage in its union negotiations.

   Synonyms: pull, clout, weight, strength, advantage

4. the use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one's investment, to control a much larger investment, or to reduce one's own liability for any loss.

verb (used with object)

leveraged, leveraging 

1. to use (a quality or advantage) to obtain a desired effect or result.

   She was able to leverage her travel experience and her gift for languages to get a job as a translator.

2. to provide with leverage.

   The board of directors plans to leverage two failing branches of the company with an influx of cash.

3. to invest or arrange (invested funds) using leverage.

4. to exert power or influence on.

   It was Joe who leveraged her to change her habits.

leverage

/ ˈlɛv-, -vrɪdʒ, ˈliːvərɪdʒ /

noun

1. the action of a lever

2. the mechanical advantage gained by employing a lever

3. power to accomplish something; strategic advantage

4. the enhanced power available to a large company

   the supermarket chains have greater leverage than single-outlet enterprises

5. US word for gearing

6. the use made by a company of its limited assets to guarantee the substantial loans required to finance its business

leverage

1. The amount in which a purchase is paid for in borrowed money. The greater the leverage, the greater the possible gain or potential loss.

Other Word Forms

• nonleveraged adjective
• unleveraged adjective

Word History and Origins

Origin of leverage¹

First recorded in 1715–25; lever + -age

Example Sentences

He claims that Deutsche Bank misused “netting” practices that allow banks to offset credit risk exposure, thereby inflating the bank’s capital and leverage ratios.

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This gives it the flexibility to add some leverage without taking on substantial risk.

Read more on The Wall Street Journal

At the U.N.’s COP30 climate talks, the focus was on “catalytic capital,” a type of leveraged finance where a small pool of capital is used to attract a much larger one.

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The Genesis Mission aims to leverage government and university scientific datasets to build AI models for various problems.

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Many regard it as a leveraged investment vehicle offering exposure to Bitcoin, though it does bring in some money from its software business.

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Related Words

• advantage 
• bargaining chip 
• clout 
• weight