A leveraged lease is a:
A) lease where the lessee is the owner of the asset for tax purposes.
B) sale and leaseback arrangement.
C) type of operating lease.
D) lease paid with money borrowed by the lessee.
E) lease where the lessor borrows on a nonrecourse basis.

Question

Quizplus · Accepted Answer

A leveraged lease is a type of lease where the lessor borrows funds from a third-party lender on a nonrecourse basis to finance the acquisition of the leased asset. The principal and interest payments on the borrowing are covered by the lease payments made by the lessee. The lessor typically has no recourse to the lessee beyond the lease payments for the repayment of the financing arrangement.

A Leveraged Lease Is A