Course: Why businesses borrow money
4 minute read
How can debt be "good" or "bad?"
Labeling debt as good or bad makes it sound black and white, but the truth is that there’s a lot of gray area. Ask yourself the following questions to help determine if your debt is "good" or "bad."
- Can you comfortably pay off the loan in the amount of time given?
- Is it paying for things that will contribute to the growth of your business?
- Is the loan low interest with fair terms?
Examples: new equipment, trainings and certifications, inventory expansion