Running a business requires more than passion and a great idea. It requires strong financial decision making. In recognition of Financial Literacy Month this April, the Chamber is launching a special blog series designed to help business owners strength the financial foundations of their companies. Throughout the month, we’ll share insights from financial service Chamber members on strategies that help businesses manage cash flow, plan for taxes, access capital and build financial resilience. By Adam Alspach, VP Alpine Bank Steamboat

The late godfather of banking, J.P. Morgan, once said: “No problem can be solved until it is reduced to some simple form. The changing of a vague difficulty into a specific, concrete form is a very essential element in thinking.”

Every financial decision—whether in business, investing, or personal life—comes with layers of complexity. It can feel overwhelming. But if you take the time to simplify the issue, the right path often becomes clear. Nowhere is this more true than when deciding whether or not to use debt.

The most successful people I know understand the power of leverage. More importantly, they know how to use it without putting stress on their cash flow.

Let’s start with what I call “debt that burdens.” The internet defines this as a high level of debt that makes repayment difficult and requires a significant portion of income to service. But I’d take that a step further—debt doesn’t have to be large to be burdensome. Even small amounts of debt, if they’re not actively working toward improving your personal or business well-being, can weigh you down.
Sure, a bear bite is worse than a mosquito—but mosquitoes affect far more people and can create bigger problems over time.

At its core, debt makes things more expensive. A $50,000 car financed might really cost you $60,000. A $10,000 vacation on a credit card could easily turn into $12,000 by the time it’s paid off. In business, carrying balances on lines of credit directly impacts your monthly income. Ever wonder why Sam down the street can sell the same product for less? Odds are, Sam is managing cash flow better and avoiding unnecessary debt.

So the natural question is: if debt makes things more expensive, can it ever be beneficial?

Absolutely.

If debt is used to reduce expenses, increase income, or build long-term wealth, it can be a powerful tool.

On the personal side, using debt to purchase a home can help you build equity over time. There may also be tax advantages, and historically, real estate tends to appreciate. That’s an example of debt working for you.

On the business side, leverage can create efficiencies. Suppliers often offer discounts for buying in bulk. In many cases, it’s cheaper to pay interest on borrowed money than to miss out on those savings. Real estate investors regularly use leverage to expand their portfolios and diversify across multiple properties.

In fact, debt plays a central role in how investments are valued. In commercial real estate, for example, both investors and appraisers rely on capitalization rates to determine the value of an income-producing property—and the structure of the debt behind that investment is a key part of the equation.

Yes, this conversation can go deep, and the details can get complex. But if you bring it back to the basics, the decision becomes much simpler:

Is this debt helping me move forward—or holding me back?

If you can answer that honestly, you’ll make better decisions every time.

And if you ever want to continue the conversation—or even argue a little—I’m always up for it.

Let’s hitch the pony to the wagon and keep playing the game.