Use good debt to fuel product growth without breaking the bank

Imagine you’re a chef opening a new bistro. You need to buy ingredients in bulk at wholesale prices, but you don’t have enough cash on hand. A smart move is to take a short-term loan against a predictable revenue stream—say, event catering—so you can place a bigger order. You pay a little interest, but you save 30 percent on cost per pound of truffles. That funding arbitrage turns a cash crunch into pricing leverage.

The same principle applies to product entrepreneurs. Good debt is simply financing that delivers a higher ROI than the interest you pay. If an extra $5,000 order of widgets yields $15,000 in sales, borrowing at 10 percent is a no-brainer. But bad debt—buying a fancy office chair or Christmas gifts—might give zero return, trapping you in endless repayments.

The trick lies in timing. Look at your sales cadence and reorder lead times. As soon as you see a reliable demand curve, line up a loan or credit facility. Amazon Lending, SBA loans, or even local small-business programs can deliver funds in days rather than months. Use those funds to lock in inventory before prices rise or competitors squeeze margins.

Then, treat repayment as another business metric. Reinvest a portion of each sale directly to whittle down the principal. This way, your debt becomes another lever to drive growth—one that accelerates returns rather than sapping your resources.

You know you’ll need more inventory to fuel growth, so calculate future profits on your next bulk order. Compare lending options for speed and rates, then line up the fastest, cheapest source before you run low. Once your new stock arrives, commit a share of every sale to repay the debt early. This smart debt strategy gives you capital when you need it and costs you less in interest. Start by exploring one lender today.