le·​ver·​age | \ˈle-və-rij, ˈlē-;ˈlev-rij, ˈlēv-\

Definition of leverage 

(Entry 1 of 2)

1 : the action of a lever or the mechanical advantage gained by it

2 : power, effectiveness trying to gain more political leverage

3 : the use of credit to enhance one's speculative capacity


leveraged; leveraging

Definition of leverage (Entry 2 of 2)

transitive verb

1 : to provide (something, such as a corporation) or supplement (something, such as money) with leverage also : to enhance as if by supplying with financial leverage

2 : to use for gain : exploit shamelessly leverage the system to their advantage— Alexander Wolff

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Examples of leverage in a Sentence


The union's size gave it leverage in the labor contract negotiations. The player's popularity has given him a great deal of leverage with the owners of the team. I used the leverage of the bar and a wooden block to pry the rock out of the hole.


The company wants to leverage its brands more effectively. a reality show contestant who's trying to leverage her 15 minutes of fame
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Recent Examples on the Web: Noun

And both sides essentially hope to leverage customer outrage as a bargaining chip. Chaim Gartenberg, The Verge, "Dish customers lose HBO in ongoing distribution dispute," 1 Nov. 2018 The pieces keep in a warm family of hues — terracotta, ecru and slate —and leverage timeless floral prints so nothing feels too trend-driven. Isabel Greenberg, Harper's BAZAAR, "Sézane Is Launching Their First Ready-To-Wear Collection With Sea," 4 Sep. 2018 Basically, all Jenner does to make all that money is leverage her social media following. Leah Prinzivalli, Allure, "Kylie Jenner, 20, Is Officially the Wealthiest Self-Made Woman in Her Family," 11 July 2018 The team did not trust him in high-leverage spots in the postseason. Andy Mccullough, latimes.com, "Dodgers pitcher Ross Stripling making most of chance at starting," 4 June 2018 Rather, most are assessing that the Trump administration is still just maneuvering for leverage and won’t follow through with the full raft of tariffs the president has threatened. Tory Newmyer, Washington Post, "The Finance 202: Stock market shrugs off Trump's trade war," 10 July 2018 Players with some leverage may wrangle two years of security before ceding control to the team. Andrew Brandt, SI.com, "How NFL and NBA Contracts Differ, and What NFL Players Can Do to Change It," 10 July 2018 The Magic enter free agency with leverage in the Gordon sweepstakes. Josh Robbins, OrlandoSentinel.com, "Magic Mailbag: Will Orlando re-sign Aaron Gordon?," 30 June 2018 On June 30, with little leverage and trying to salvage some value, the Pacers traded Paul George to the Oklahoma City Thunder. Jenny Green, Indianapolis Star, "Paul George is trying to do to Oklahoma City what he did to Indiana," 28 June 2018

Recent Examples on the Web: Verb

Alternate route Unlike Allison who leveraged the work of others on CTLA-4, Honjo was the first to identify the PD-1 protein. John Timmer, Ars Technica, "Treatments that cause the immune system to attack cancer earn a Nobel," 1 Oct. 2018 But the figure also serves as the latest - and one of the largest - examples of how celebrities can leverage their fame to take on another job title: business mogul. Rachel Siegel, chicagotribune.com, "Kylie Jenner is on track to become the youngest self-made billionaire. Ever.," 14 July 2018 Now that Instagram is putting a bigger focus on video with the launch of IGTV, influencers will need to figure out how to leverage their personal brands there, too. Madeline Buxton, refinery29.com, "From Roses To Riches: Reality Stars Are Making Bank On Instagram," 20 June 2018 Easy-money monetary policies have allowed firms to load up on borrowings, with around 37 percent of companies being classed as highly leveraged in 2017 compared with 32 percent in 2007, according to S&P Global Ratings. Lisa Lee, Bloomberg.com, "Fearing the Fed, Credit Investors Are Buying More Junk Instead," 27 Apr. 2018 In a separate coral reef project, also being conducted with Planet and the Carnegie Institution, The Nature Conservancy is leveraging Carnegie’s computer vision AI to develop a high-resolution map of the shallow waters of the Caribbean basin. Bill Gourgey, WIRED, "How Artificial Intelligence Could Prevent Natural Disasters," 10 July 2018 Moving SmackDown Live to broadcast TV and having the ability to leverage FOX’s extensive portfolio of world-class sporting events will expand the reach of our flagship programming. Justin Barrasso, SI.com, "The Week in Wrestling: Who Is The Best World Champion Right Now?," 27 June 2018 And figuratively: The administration is leveraging the suffering of these families in order to pressure Democrats into capitulating to the administration’s policy demands. Jonathan Chait, Daily Intelligencer, "Why Trump Is Using Hostage Tactics on Family Separation," 18 June 2018 Some companies are also leveraging their office space to create value for current and prospective employees. Rachel Everaard, Houston Chronicle, "Managing millennials in the oil and gas industry," 2 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'leverage.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of leverage


1830, in the meaning defined at sense 1


1957, in the meaning defined at sense 1

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Statistics for leverage

Last Updated

14 Nov 2018

Look-up Popularity

Time Traveler for leverage

The first known use of leverage was in 1830

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More Definitions for leverage



Financial Definition of leverage

What It Is

Leverage is any technique that amplifies investor profits or losses. It's most commonly used to describe the use of borrowed money to magnify profit potential (financial leverage), but it can also describe the use of fixed assets to achieve the same goal (operating leverage).

How It Works

Financial Leverage

Let's look at selected balance sheet and income statement information for Company XYZ.

Company XYZ has invented a new product that will revolutionize the widget market, but it needs to build a new $1,000,000 factory. It must choose between using equity or long-term debt to build the factory. We can see the impact on profits of both decisions.

Scenario A: Raise $1,000,000 by issuing new stock

XYZ is able to raise $1,000,000 by issuing 500,000 new shares at $2 per share. It builds its new factory and immediately sees revenues double and operating expenses increase by $300,000 (about 43%). Let's look at the impact on its financial statements:

Profit per share has almost tripled. That's pretty good.

Scenario B: Use financial leverage, raise $1,000,000 in debt

Let's see what happens if XYZ chooses to use $1,000,000 in debt to finance its new factory. Assume it can borrow at 5% per year.

By using leverage, Company XYZ increases the profit available to shareholders.

Operating Leverage
If we go back to Company XYZ, we can examine the effects of operating leverage on profits. Let's say the company is trying to choose between building their factory or outsourcing production to a third-party manufacturer. If they outsource production, they will pay $0.75 for each $1 widget they sell.

Scenario C: Outsource production instead of investing in additional fixed assets (the new factory)

As in the previous example, assume the company is able to double revenues when the new widget hits the market.

Comparing the results side-by-side, we can see the effects of leverage on profit potential:

Leverage it is not without risk. It requires a commitment to keep up with the principal and interest payments on the debt. If it's unable to do so, it will be forced into bankruptcy and shareholders will lose everything.

Why It Matters

Too much leverage can be bad, but there's no hard and fast rule as to how much is too much. No matter what its use, leverage can be a powerful tool when used responsibly. Savvy investors and companies use leverage to expand, hedge and speculate, but the overly aggressive can easily get in over their heads by losing money or going into bankruptcy.

For investors considering companies with debt, one of the most popular evaluations of a company's leverage is the debt-to-equity ratio (D/E). The interest coverage ratio, also known as times interest earned, is also a measure of how well a company can meet its interest-payment obligations. In general, these ratios suggest whether a company is "too safe" and is neglecting opportunities to magnify earnings through leverage or is overleveraged and at serious risk of default or bankruptcy.

Source: Investing Answers



English Language Learners Definition of leverage

 (Entry 1 of 2)

: influence or power used to achieve a desired result

: the increase in force gained by using a lever



English Language Learners Definition of leverage (Entry 2 of 2)

: to use (something valuable) to achieve a desired result


le·​ver·​age | \ˈle-vrij, -və-rij \

Legal Definition of leverage 

(Entry 1 of 2)

: the use of credit to enhance one's speculative capacity


transitive verb
leveraged; leveraging

Legal Definition of leverage (Entry 2 of 2)

: to provide (as a corporation) or supplement (as money) with leverage

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Comments on leverage

What made you want to look up leverage? Please tell us where you read or heard it (including the quote, if possible).


to clear from alleged fault or guilt

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