Leverage

Leverage is the use of various financial instruments or borrowed capital to increase the potential return on investment. Leverage can also refer to the amount of debt used to finance assets. When one refers to something as "highly leveraged," it means that item has more debt than equity.

For example, if you have $50,000 in cash and borrow $30,000 to start a business, having a total cost of $80,000. You are using $80,000 for investment in your business with only $50,000 of your own. This remaining $30,000 is financial leverage.