It depends on where you are in your growth cycle, your personal balance sheet, and your risk tolerance.
I’m conservative, I don’t like to buy anything unless we can pay cash for it. We run our business the same way. When it’s time to expand, it’s because we are bursting at the seams, and we’ve got the cash to pay for the growth.
Ten years of loans at rates approaching 0% (essentially) have been too alluring to some, and have heavily distorted the financial landscape. In the old days, when a large company made money, they paid off loans, gave raises to employees, and grew the business. In the 21st century, with the ability to borrow almost limitless amounts of money at very low interest rates, some of the largest companies in the world used all their free cash to reward stockholders by paying dividends and repurchasing shares. When they ran out of money, they borrowed more, and then used that cash to fund more dividends and share repurchases.
Now that a majority of retail companies have seen the spigots turned off, that debt is a huge burden to carry, and it could bring some businesses to their knees.
While minimizing your debt load can slow growth, it also gives you a lot of flexibility when times are tough.
https://www.linkedin.com/posts/markjsheffield_dealers-cash-debt-activity-6661687846816010240-7HWm
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