Financial LeverageDirect Finance
Financial leverage refers to the use of borrowed funds to increase the potential return on investment. Direct finance involves obtaining funding directly from a financial institution or lender, rather than through intermediaries such as brokers or investment banks. This type of financing can include loans, lines of credit, and other types of debt instruments. In the context of direct finance, financial leverage is used to amplify returns by borrowing money at a lower cost than the return on the investment.