> Seems to me when a crisis hits the last thing you want to have is debt you need to pay back. I think that when a crisis hits the first thing you want is cash

> Seems to me when a crisis hits the last thing you want to have is debt you need to pay back. I think that when a crisis hits the first thing you want is cash, and that means the last thing you want is to have just spent all your cash paying off debt. Imagine that you need to buy $100,000 of inventory to sell, and you have $100,000 to spend. If you spend all your cash on inventory, then you have zero dollars on hand. When your account comes back and tells you that you need to pay another $10,000 in taxes — now you need to borrow, and it's a lot more difficult to borrow with nothing in the bank than with $100,000. When one of your customers trips and falls on the just-washed bathroom floor, you need money to compensate him. Not having cash is pretty awful: necessary cash outflows can be spiky, and income can be spiky, but the spikes do not necessarily need to align. This can lead to a cash flow crisis, and eventually to a restructuring bankruptcy. OTOH, if you had borrowed the money to buy that inventory, then yes you would have had to pay $110,000 or $105,000 or whatever, but you would also have had the freedom that cash gives you. Borrowing would have smoothed out a major expense, and permitted you to pay it off in smaller chunks, making a cash flow crisis less likely (although of course still possible). Consider right now, with the whole COVID-19 situation. It could very well make sense to borrow at a good interest rate: the difference between the interest rate on debt and one's investment return rate is essentially the cost of insurance to have cash on hand. Note that sometimes this can even be negative: it is possible even now to get 0% interest-rate credit cards with terms of over a year: you can invest the cash and pay it off in twelve months.