How much money should a small business borrow? How much business debt is too much? How do you balance liquidity with debt? Though borrowing money is a way for many small businesses to grow and expand, it may not always be the best option in the long run because it adds risk to the business that does not go away until the business loan is paid off.
In this episode of Financial Cents, two long-time bankers, John Lewis and Brent Cannon, sit down to discuss an idea that you might not expect to hear from a business banker: just because you can borrow doesn’t mean you should. John, who is senior vice president and business banking manager at National Bank of Arizona, goes on to explain that “sometimes small business owners focus too much on buying new equipment rather than the end result.”