I am often asked, when is debt good? The answer: when you are using it strategically to grow your business by ordering excess inventory or purchasing equipment that will generate more revenue than the cost of the debt.

Debt becomes a problem when you use it to cover cash flow gaps caused by structural issues in your business — when you’re borrowing to pay for things that should be covered by revenue. That’s a sign your margins, fees, or expense structure needs attention. Get help early. The longer you run on borrowed money without addressing the root cause, the harder the correction becomes.