There’s a number from our research that surprised even me.

The businesses we categorized as Struggling carry the most debt by far, at 40% of annual revenue. That part wasn’t surprising. Debt piles up when the underlying economics are broken and cash keeps running short.

Here’s the part that surprised me.

Healthy businesses carry the least debt, at just 6.6% of revenue. Thriving businesses actually carry 12.3%, almost double the Healthy group.

If debt were simply bad, Thriving businesses should have the least of it. But they don’t.

It’s Not How Much Debt, It’s What the Debt Is Doing

The Struggling group is using debt to survive: covering payroll, buying inventory they can’t otherwise afford, keeping the lights on through a rough stretch with no clear plan for how the debt gets paid down.

The Thriving group is using debt to build: a calculated inventory buy ahead of a proven product’s peak season, a bulk order where the margins are already validated, or a short-term bridge on a move they know will pay for itself.

Same debt. Completely different purpose.

Healthy businesses tend to be conservative with debt because they’re still building the confidence and the margin cushion to use it well. That’s not a criticism — it’s often exactly the right instinct at that stage.

But once the structure is solid, debt stops being a risk and starts being a lever. The businesses that grow fastest aren’t avoiding debt. They’re using it on purpose, for specific moves they’ve already done the math on.

If you’re sitting on debt right now, the question isn’t whether to feel bad about it. It’s whether you know exactly what that debt is doing for you, and whether it’s paying for itself.

See the proof in our report here.

Then let’s talk about how to fix it.

Cyndi

Quick Summary

• Struggling ecommerce businesses carry the most debt (40% of revenue), typically used to survive cash shortfalls.
• Healthy businesses carry the least debt (6.6% of revenue) as they build financial confidence.
• Thriving businesses carry more debt than Healthy ones (12.3%) — but use it strategically to fund proven, high-margin growth moves.
• The determining factor in business debt isn’t the amount, it’s the purpose: survival debt vs. growth debt.
• Once a business has a solid financial structure, debt can become a calculated lever for growth rather than a risk.

FAQ

Why do Thriving businesses carry more debt than Healthy businesses?
Thriving businesses use debt strategically to fund growth moves they’ve already validated, such as inventory buys ahead of peak season or bulk orders with confirmed margins, rather than to cover shortfalls.

Is carrying business debt always a bad sign?
No. Our research found debt levels alone don’t indicate financial health. What matters is whether the debt is funding survival (a warning sign) or a calculated growth move (a strategic lever).

How much debt do Struggling ecommerce businesses carry on average?
Struggling businesses in our research carried debt equal to about 40% of annual revenue, largely used to cover payroll and inventory gaps without a clear repayment plan.

How can I tell if my business debt is helping or hurting me?
Ask whether the debt is paying for itself: is it tied to a specific, validated growth move, or is it covering ongoing cash shortfalls with no clear resolution? Your Profit Team’s Special Report breaks down this framework in detail.