Discussion Audio - Audio Only No Video

I admit for many years I was against debt.  I was against debt period in business and life.  I wanted to live without debt.  I ended up, of course, as some people will say finding out that living without debt is possible but not easy.  I also learned that the way I think about debt is not how the system works.  For me, debt is something you use as a last resort.  Once you have exhausted all your means.  But debt today means that if you have money get debt to preserve your money. 

My heritage has taught me that we don’t’ borrow from someone until we have used what we have.  Not that you borrow from someone even when you have something.  I still believe debt is the last option, but I have learned that if you don’t use debt, you will not have access to borrow when you need to borrow. 

It is interesting that you can only get credit when you have money.  But the truth of the matter is I went a length of time not using debt.  A goal is to not destroy your score during a challenging season.  Coming out of a hard season can be a battle.  I learned that the history we put in does not count anymore and essentially, we must start over.

I did not consider that just like unfavorable information falls off credit so does the favorable information.  Thereby learning to be consistent with credit was what people need to know.  Learning that, yes, we use credit when we have money. 

Thereby should we borrow to build business?

I say it depends if you have enough income from the business.  Perhaps you are using income from other means to start the credit, and I get that.  But at some point, you will need to have income in the business that can pay off the credit each month.  Just as you would with personal credit.  Can you borrow and pay back within a short amount of time?  The name of the game is to basically delay using what you have. 

I am not a credit specialist so I will not offer advice and tips.  I would recommend that you research. And most importantly don’t get over extended trying to build debt.  Also don’t allow debt to be your only means of income.  When I wrote about finance, I explained finance is funding or fund raising.  Using debt is borrowing which is also a form of finance.  We want our income to come from operations (work earned income) unless your business is a finance business.  In previous articles I discussed more on that topic. 

I end with I have changed my mind about debt.  I still know we must be careful with debt.  Don’t allow debt to eat up your future income.  And don’t solely depend on debt.  You don’t have to shut down or delay startup if you can’t get debt or other funding.  Often using your personal funds is the best way to get things going.  Then small loans as in time. 

Time truly builds a business.  One step at a time.