I think we are conflating "available credit" and "utilized credit". (Or, rather, I didn't clarify that myself.) Available credit is something like, "Company X

I think we are conflating "available credit" and "utilized credit". (Or, rather, I didn't clarify that myself.) Available credit is something like, "Company X has $100M in annual revenue and a $5M line of credit, which is not presently utilized." Arguably, such a company is better positioned than the same company X without the $5M credit facility. The cost of the annual fee to maintain the credit facility will be miniscule compared to the security provided by having $5M instantly available in a rainy day scenario. This is the way by which I mean some corporate debt (specifically: available revolving credit) is "obviously" a good idea. You're right that term loans involve more trade-offs: interest, maturity, etc. But those are still trade-offs, not always downsides. Assuming even a modest annual-interest-rate-beating growth rate in the business with a high probability that such growth materializes, the debt can make the business easier to manage and actually increase the probability of sustainable growth. That's the other way in which I believe that debt can be an obvious benefit. But obviously if you take too large a term loan, it can be disastrous, thus my question about debt ratios. For example, for company X above, it's obvious to me that a $100M term loan would probably be dangerous. But, a $10M term loan vs $5M? Not sure. That's why I am curious about ratios.