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"Good" debt can help grow your business

Not all debt is bad. Managed wisely, borrowed funds can be a useful tool for any business. But with debt comes risk.
By Mark E. Battersby
Published: June 15, 2015
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One of the most daunting four-letter words for business owners—particularly those with smaller businesses—is the word “debt.” Not surprisingly, the tightening of credit, fewer sources for capital and general skittishness on the part of lenders has made avoiding debt easier for many small-business owners. But is operating and growing a debt-free business really practical?
Debt can best be compared to “leverage” because borrowed funds have helped many businesses grow their operations using someone else’s money. Debt is borrowing money from an outside source with the promise to repay the funds along with an agreed-upon amount of interest for its use. Despite debt’s negative connotation, even the healthiest of corporate balance sheets will include some level of debt.
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