Young entrepreneur starting life should avoid running into debt. There is scarcely anything that drags a person down like debt.
Money is in some respects like fire; it is a very excellent servant but a terrible
master. When you have it mastering you; when interest is constantly piling up against you, it will keep you down in the worst kind of slavery. But let money work for you,
and you have the most devoted servant in the world. It is no “eye-servant.”
There is nothing animate or inanimate that will work so faithfully as money when placed at interest, well secured. It works night and day, and in wet or dry weather.
Do not let it work against you; if you do there is no chance for success in life so far as money is concerned.
Having a well-financed business that doesn’t rely on bad sources of debt goes a long way to making a company attractive to buyers and ensuring that it fetches an attractive valuation.
Entrepreneurs that want to sell should review all such balance sheet assets to ensure the company is in good financial health. A business using debt to finance assets that are under-utilized, including machinery and real estate, should rectify the situation. For example, if an asset is being underutilized, it makes more sense to sell the asset, retire the debt and sub-contract that work.
While those loans may be convenient and easy to sign up for online, loans with interest rates at 20 percent annually or even higher are a turnoff for a new buyer. While bad debts can be keeping the business afloat, they signal that the business may be difficult to finance.