Well, one of the main ways that businesses can get money to fund expansions, equipment purchases and leases, inventory purchases and the payment of unexpected debts is by getting a business loan. However, just as lenders make judgments on the financial stability of individual borrowers before making loans, they look at the financial stability of companies as well. One important factor that they look at is a business's debt to income ratio.
Debt is typically negative, as it is a liability, and cash is good, because it is money and thus an asset. However, a recent Bankrate survey
found nearly half the nation has more credit card debt than emergency savings, a worrisome sign.