Money Matters: Debt, used well, is not evil
By Ashleigh Petersen Ami Kassar
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Money Matters: Debt, used well, is not evil

I talk a lot about debt financing and its many benefits. However, I want to be precise. My intention is never to “shove debt down someone’s throat.” Debt can be an excellent option for some, but it’s not for everyone. If taking on any amount of debt means that your anxiety will go through the roof and prevent you from sleeping — do not take it.

That being said, I often find myself challenging many business owners’ pre-conceived notions of “debt always being evil.” Debt can be evil if you misuse it, but it can be a great tool to grow if used correctly. Most entrepreneurs are pleasantly surprised when I tell them that they can get money to grow without bringing on an equity partner and without significantly restricting their cash flow. Having a set monthly payment is a predictable way to manage the remainder of your cash flow each month in case of emergencies and preserve future profits.

You don’t have to wait for your cash flow to skyrocket to grow, and you don’t have to sell equity to grow and try to become a unicorn. But, in the media, you always see the entrepreneurs highlighted who were able to grow their company at an incredible speed, and sometimes you may wonder, “Why not me? Why can’t I do that?”

Just because you are a business owner doesn’t mean you have to be able to stomach that level of risk and speed. Many of us don’t have that kind of tolerance. Maybe we did when we had nothing to lose, and now there’s everything to lose. There are plenty of growth lanes in the middle, and you should never be ashamed of taking one of those. This is your business, do what works for you.

Business owners should remain open-minded and take in all the information they can that could benefit their company and lead to a better life for them and their employees. That’s what you owe to yourself and the company.

By educating yourself about debt, you will gain perspective and clarity on what other options are available for you to grow your business in a way that feels authentic and “safe.” Of course, even after that education, you may still only feel comfortable enough to grow slowly through cash flow — and that’s OK. At least now you know another way to finance your company’s growth without sacrificing control and future profits.

I understand why equity can be much more appealing than debt, but it almost always is more expensive. Plus, it is perfectly normal to want complete control over your created business. Many companies that take on massive equity injections and grow exponentially have a different motive — to sell the company to the highest bidder and move on. The goal of selling your business for a profit can be a great exit strategy, but that doesn’t mean it is the sole goal to have. Some of us love what we do, love helping others, and want to be the ones who bring our product/service to the consumers.

It may seem like a worn-out concept, but don’t compare yourself to others in business. Instead, educate yourself, gain perspective, and choose a growth lane that fits your risk tolerance. This will help you sleep better at night, and it will help you feel better about where your company is at.

Ami Kassar is the founder and CEO of MultiFunding, a Philadelphia-based consulting firm that specializes in helping business owners across the U.S. develop creative, cost-saving alternatives for their business debt needs and structure. He can be reached at ami@multifunding.com or multifunding.com.

Ashleigh Petersen

Ashleigh PetersenAshleigh Petersen

Ashleigh Petersen is the associate editor for Rental Management. She writes news and feature articles, plus coordinates the monthly Safety Issue and several sections in the magazine. Ashleigh loves spending time with her husband and young son, baking, gardening and listening to true crime and comedy podcasts.

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