le·​ver·​age | \ ˈle-və-rij How to pronounce leverage (audio) , 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

Keep scrolling for more

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
See More

Recent Examples on the Web: Noun

That’s given leverage to big-name filmmakers and showrunners, especially as studios need more content than ever. Fortune, "J.J. Abrams and WarnerMedia Team Up for Massive Deal Through 2024," 12 Sep. 2019 Miguel has no choice but to accept her conditions after Assistant U.S. Attorney Lincoln Potter (Ray McKinnon, reprising his role from SOA) takes in his family and friends as leverage. Rosy Cordero, EW.com, "Everything to remember from Mayans M.C. before its season 2 premiere," 3 Sep. 2019 At a time of such political and economic vulnerability the EU’s economic weight alone—its GDP is 24 times larger than Turkey’s—gives it huge leverage. The Economist, "The EU’s relationship with Turkey is failing," 25 July 2019 Disney and NBCUniversal are both gearing up to launch their own streaming services, which gives them leverage to charge other providers even more for access to their programming or risk losing access completely. Anna Washenko, Ars Technica, "PlayStation Vue applies a $5-a-month increase to all live TV plans," 1 July 2019 The recruiting problem has given potential participants leverage and altered their relationship with clinical researchers: a trial that is too burdensome, or forces many participants into a control group, could be doomed to failure from the start. Heidi Ledford, Scientific American, "A Question of Control," 16 May 2019 In some cases, police have used the giveaways as leverage to demand that people hand over their footage, although Ring says it is supposed to be voluntary. Hanna Kozlowska, Quartz, "Check to see if your police department is getting information from Amazon’s Ring cameras," 28 Aug. 2019 For running back Melvin Gordon, a teammate to Rivers who’s holding out for a better contract, James’ setback may have increased his leverage at the bargaining table. San Diego Union-Tribune, "Column: James’ injury a blow to Chargers, but team still equipped to succeed," 16 Aug. 2019 Hasidic Jews tend to vote in blocs, increasing their political leverage. Sharon Otterman, New York Times, "‘Keep the Hasidic Out’: A Small-Town Housing Showdown," 14 Aug. 2019

Recent Examples on the Web: Verb

Who would have thought that the rainy-day deposits of Japan’s farmers and fishermen would be used to fuel leveraged buy-outs in America and Europe? The Economist, "How rock-bottom bond yields spread from Japan to the rest of the world," 14 Sep. 2019 Brands have responded to these issues in various ways, including by leveraging their own sales channels. Marc Bain, Quartzy, "Do fashion weeks still have a purpose?," 7 Sep. 2019 Well, a few men at the top who have figured out how to leverage the concept of masculinity to control other men. Jennifer Wright, Harper's BAZAAR, "Why Being a “Real Man” Will Kill You," 29 Aug. 2019 Finally, The Complete Google AdWords Course: Beginner to Advanced (8 hours, 77 lessons) shows you how to leverage Google's advertising platform in order to successfully convert customers. Noelle Ike, CNN Underscored, "SEO, social media, email: It's all covered in this 15-course digital marketing bundle," 26 Aug. 2019 In 2018, Lizzo was just beginning to figure out how to leverage viral fame. Marcus Jones, EW.com, "How 'Truth Hurts' became Lizzo's breakout hit two years after its release," 18 July 2019 The collective, overall vision takes advantage of the topography, open space and magnificent views to leverage the asset of the PGA of America. Steve Brown, Dallas News, "First look: Frisco's 2,500-acre Fields development will have a new city center and thousands of homes," 24 June 2019 But developers would be able to leverage historic tax credits, Jaeger noted. Jennifer Larino, nola.com, "Market Street power plant has sat vacant for decades. Now there’s a renewed push to develop it.," 11 June 2019 May leveraged her knack for gaining patronage into sporadic artistic opportunities. Erin Blakemore, Smithsonian, "The New ‘Little Women’ May Finally Do Justice to Its Most Controversial Character," 14 Aug. 2019

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.

See More

First Known Use of leverage


1830, in the meaning defined at sense 1


1957, in the meaning defined at sense 1

Keep scrolling for more

Learn More about leverage

Statistics for leverage

Last Updated

19 Sep 2019

Look-up Popularity

Time Traveler for leverage

The first known use of leverage was in 1830

See more words from the same year

Keep scrolling for more

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)

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


le·​ver·​age | \ ˈle-vrij, -və-rij How to pronounce leverage (audio) \

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

Keep scrolling for more

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

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).


concealment of treason or felony

Get Word of the Day daily email!

Test Your Vocabulary

The Exceptions Quiz III

  • one green toy robot amidst many red toy robots
  • Which of these words does not mean "nonsense"?
Spell It

Can you spell these 10 commonly misspelled words?

Bee Cubed

Test Your Knowledge - and learn some interesting things along the way.

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!