Using debt to leverage business growth and profitability is very common. As long as the business generates enough cash to cover the principal and interest repayments, everything is fine. However, if the business does not do well due to any reason, finding enough cash for the debt repayment can be tough. The situation may force the owners to take on more debt to repay the earlier ones.
If the business takes on too much debt, it might force a business closure causing substantial losses to both the owners and the creditors. If a debt trap threatens the existence of your business, you could look at debt consolidation to bail you out. Take a look at its pros and cons: Read More