If a firm sells equipment and subsequently leases it back, that is illustrative of a leveraged lease.

Question

If a firm sells equipment and subsequently leases it back, that is illustrative of a leveraged lease.​

Quizplus · Accepted Answer

A sale and leaseback transaction is different from a leveraged lease. In a sale and leaseback, a company sells an asset and leases it back for a long period, whereas a leveraged lease typically involves a lessor, a lessee, and a lender, with the lessor using borrowed funds to purchase the asset being leased.

If a Firm Sells Equipment and Subsequently Leases It Back