Leveraging Your investments – Pros and Cons
Leverage: in a fund structure, loans last longer than 6 months. If you have $10 million to invest, a credit company may give you a credit line of $10 million. However, the credit company is in first position should something go wrong.
Leverage is a business term that refers to how a business acquires new assets for startup or expansion. When a business is “leveraged,” it means that the business has borrowed money to finance the purchase of assets. Businesses can also use leverage through equity, by raising money from investors.
Bill talks about a leverage situation that occurred in 2008. And the collapse that happened as a result.