A situation where a firm is limiting its use of borrowed funds for the purchase of assets. The funds borrowed for the purchase can not total more than 50% of the purchase price. For example, if a firm wanted to purchase a copy machine that was priced at $2,000, the company would borrow no more than $1,000 if they have initiated an unleveraged program. A firm borrowing more than 50% of the purchase price is using a leveraged program.

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