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Financing Your Investments

Financing your investment can be positive, neutral, or negative. When financing or leveraging your investment is positive, investors expect a higher return on their investment than if they purchased it. When performing a financial analysis, the results may reveal using financial leverage will affect the investor by receiving a lower return on their investment than if they had not received any financing, this is considered negative or unfavorable leverage. Neutral or Unbiased leverage occurs when the investor and the lender expect to receive identical rate return.