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

Pursuing simultaneous negotiations with more than a dozen other cities gave Amazon maximum leverage in its negotiations with officials in the Washington, DC, and New York metropolitan areas. Timothy B. Lee, Ars Technica, "Amazon is getting more than $2 billion for NYC and Virginia expansions," 13 Nov. 2018 That status, along with a shortage of teams with significant salary cap space, gave the Magic significant leverage in the process. Josh Robbins, OrlandoSentinel.com, "Aaron Gordon’s new Magic contract brought tears to his eyes," 10 July 2018 North Korea and Washington have yet to negotiate the terms under which the North would relinquish its weapons, so Pyongyang can be expected to seek leverage in those discussions. Deb Riechmann And Matthew Pennington, Fox News, "Experts see risks in US plan to dismantle NKorea's nukes," 4 July 2018 Trump has called for comprehensive immigration reform and suggested that the controversial family policy could give him leverage in the fight. Jim Morrill, charlotteobserver, "Is the separation of families a 'cruel' policy or result of a broken system?," 19 June 2018 Absent deeper banking reforms, more liquidity would probably just mean higher interbank leverage and a bubbly government bond market—two problems the central bank spent much of 2016 and 2017 dealing with. Nathaniel Taplin, WSJ, "Don’t Count on the China Put," 17 Dec. 2018 For the past decade, Blum has also made the most of the industry leverage that a massive box office can buy, backing ambitious, genre-bending movies like The Bay, Whiplash, Unfriended, Get Out, Happy Death Day, and BlacKkKlansman. Noel Murray, The Verge, "Hulu’s horror anthology Into the Dark represents the good and bad sides of Blumhouse Productions," 5 Oct. 2018 For whatever reason, Reid missed an opportunity to lean into this controversy from the very start, and to leverage and expand, rather than damage, her credibility. Chas Danner, Daily Intelligencer, "Joy Reid’s Missed Opportunity," 29 Apr. 2018 The city has been pining for a professional sports team forever and some have used it for leverage (hello, Oakland A’s), but the fear of a gambling scandal inevitably was a deterrent. Ann Killion, San Francisco Chronicle, "Golden Knights reward Vegas fans with 7-0 romp over Sharks," 26 Apr. 2018

Recent Examples on the Web: Verb

Despite the nearly decadelong buying spree, Vail’s balance sheet is conservatively leveraged, analysts say. Ezequiel Minaya, WSJ, "Vail Expansion Plan Goes Aggressive and Wipes Out," 11 Dec. 2018 Companies can leverage great personal stories to connect with customers, said Keith Hollingsworth, a professor at Morehouse College's business department. Candice Choi, chicagotribune.com, "Papa John is gone, but his image is still entwined with pizza chain," 12 July 2018 After all, many vacation-home buyers see the property not as an asset to be leveraged or traded, but a generational gift, to be enjoyed with and then passed down to the family. Chris Taylor, Fortune, "Why Your Summer House Could Be a Shaky Investment," 29 May 2018 To imagine that a country with an economy smaller than Canada’s or Italy’s could leverage a superpower ten times wealthier beggared the imagination. Jonathan Chait, Daily Intelligencer, "Russian Leverage Over Trump Is Not Just a Theory. It’s Now Fact.," 8 May 2018 In a follow-up study, researchers showed that such digital footprints can in fact be leveraged for mass persuasion. Sander Van Der Linden, Scientific American, "Psychological Weapons of Mass Persuasion," 10 Apr. 2018 Jo Salamon, North American media and communications manager at Arc’teryx, says big retailers can leverage their partnerships and ask for specific goods from brands. Heather Hansman, Outside Online, "Hey, Outdoor Industry: We Need Plus-Size Ski Gear," 26 Mar. 2018 The big advantage here is that manager time is highly leveraged and thus reduces overhead costs. Linda Clark-santos, idahostatesman, "Designing your organization for competitive edge, part 1– spans of control | Idaho Statesman," 21 Feb. 2018 The persistent fantasy that Trump can somehow be leveraged from office is behind the push to criminalize any blameworthy conduct on his part or that of his associates. Rich Lowry, National Review, "Robert Mueller Is No Ken Starr," 6 Feb. 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

10 Jan 2019

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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More from Merriam-Webster on leverage

Rhyming Dictionary: Words that rhyme with leverage

Thesaurus: All synonyms and antonyms for leverage

Spanish Central: Translation of leverage

Nglish: Translation of leverage for Spanish Speakers

Britannica English: Translation of leverage for Arabic Speakers

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