The advice of my late mother in business is to avoid debt as much as possible. It is like the Dutch philosophy in business - to grow business like a tree slowly but surely. Avoid the path of mushrooms which grow overnight and be gone the following the day. Dont be like a meteor that burns itself out.
She even hid from me a Title to large commercial building at the heart of the town because she was afraid I will hock it to the max (despite the fact that I helped her build her little fortune by my strategies.)
Lately, I came across captains of the industry in chemicals, education, and finance. The strategy is all about leveraging. Borrow borrow to grow.
1. A school purchase I witnessed involves the hocking of the property to be bought using their own real estate holding company. The monthly amortization for ten years will exceed the monthly cash flow of the loan.
2. They are to pay off a personal loan of a principal. Strategy involves transferring the TCT to the corporation, borrowing against the property P100 which is worth P200 million . The P100 million will be used to pay off the loan which could be settled at P70 million and P30 million to start the development of the property.
3, To clean the credit of a principal, they will do the same.