All debt is not bad debt -- the question you need to ask yourself is 'should my advertising agency take on debt?" Every business faces the issues surrounding cash flow and keeping the money moving in and back out the door.  Advertising agencies are no exception. Until I actually owned my own agency, I didn't really wrap my head around the differences between how much income a business generated and the daily cash flow issues. As many of you have experienced -- you can have incredible billings but that doesn't mean you have enough money to make payroll. Sooner or later an agency owner is going to be faced with the question -- should I borrow some money? Here are some reasons NOT to borrow money: Work is slow and you're over staffed.  Billings won't cover payroll but you don't want to lay anyone off. Your computers are a few years old and the creatives are starting to complain. You've had to toe the line for the past couples years and not bonus yourself.  Your husband is making not so subtle hints about Hawaii. In other words -- don't borrow to avoid tough decisions, to keep staff the business does not warrant, to pay for disposable items (sadly computers now fall into that category) or to line your own pockets.  Those are emotional, short term feel good decisions that you will regret.  Over and over. On the flip side, there are times when borrowing makes sense.  None of these are absolutes of course. To buy a building that will house your agency for years and appreciate in value over time. (Do it as a separate LLC) To invest in an opportunity that could pay off [...]