I've spent years helping businesses access debt funding.

I see it constantly - founders who've built real businesses, board members managing serious capital, management teams running profitable operations - every single one of them tenses up the moment debt enters the conversation.

It's one of the most consistent things I see in this industry, and honestly, I find it fascinating. 

Because from where I sit, debt is a tool. A powerful one. Not a last resort, not a red flag, not something to apologise for.

The problem is that most people only ever encounter debt when things are going wrong. So that's the association that sticks. Debt becomes the thing you reach for when you've run out of options - and when you use it that way, it is scary. Of course it is.

But when you use it wisely, from a position of strength, with a clear plan behind it? It can be one of the most powerful forms of capital available to your business. And unlike equity, you don't give up a single share to access it.

Ironically, one of the best examples of this isn't some obscure case study you'd never have heard of. It's something most of you interact with every single day.

Netflix.

If you're not living under a rock, you know who Netflix is. You've probably got a subscription (I hope you do, some pretty great content out there). 

They were one of the first companies to genuinely change the game in streaming. Started as a DVD-by-mail service in 1997 - which, if you're under 30, sounds like something from a history textbook - pivoted to streaming in 2007, and by 2013 were producing their own original content.

But here's the part you don’t generally go around thinking about (lucky for you, I do).

By 2020, Netflix had borrowed over $15 billion in debt to fund one of the most ambitious content expansion strategies in corporate history. For years, the company spent far more cash than it generated, pouring billions into original programming while steadily increasing its debt burden.

From the outside, it looked reckless. Critics were lining up to say the model was unsustainable, the cash burn was dangerous, and that Disney, Amazon and Apple would eventually crush them.

What those critics missed was this: Netflix wasn't borrowing because it was struggling.

It was borrowing because it was confident. And that is (the) game changer. 

Their management had made a calculated decision - global streaming was going to dominate entertainment, scale mattered more than short term profits, and whoever built the strongest content library first would win. 

So instead of waiting for profits to accumulate and funding it slowly, they borrowed heavily and moved faster than anyone else could react.

The debt funded more Netflix originals. More originals brought in more subscribers globally. More subscribers meant predictable, recurring revenue. Predictable revenue gave investors confidence. Investor confidence gave Netflix access to even cheaper capital. Cheaper capital funded even more content.

Round and round.

By the time Disney, Amazon and Apple started throwing their own billions at streaming, Netflix had already built a content library that would take years to replicate and a subscriber base with genuine habit loops baked in.

That's what the debt actually bought. Market dominance and time.

Could it have failed? Of course. If the business had stopped growing, the debt would have become the problem very quickly. This wasn't a safe play. It was a calculated asymmetric bet made by a management team that understood one thing very clearly:

Debt doesn't make a business weak. Fear of debt does.

Netflix is a great story. But it's also easy to look at and think - that's a Silicon Valley company with access to Wall Street capital. That's not my world.

Fair enough. So let me tell you about someone who makes horse supplements.

One of our brokers at FundOnion brought this client in not long ago. A genuinely strong business - profitable, healthy cash flow, a product that clearly worked.

The plan was to expand into another country. Set up a distribution centre, get into a new market, keep growing. The business could support it.

And yet - they were ready to hand over equity to an investor rather than take on debt. Not because the numbers didn't work. But because the idea of owing more than their assets was terrifying. Giving away a piece of everything they'd built felt safer than borrowing money the business could comfortably afford to repay.

Sound familiar?

The numbers told a clear story once they actually looked at them. The cash flow could comfortably service the debt - it just hadn't been looked at that way before. Debt wasn't the threat to the business. Giving away equity was.

Two weeks later the capital was secured, the expansion went ahead, and full ownership of the business remained intact. They came back for more funding shortly after - and ended up taking more than originally requested because the terms were that good.

Same principle as Netflix. 

Completely different scale. 

Identical lesson.

Netflix used debt to compress time, widen the gap, and make the competitive landscape almost impossible to navigate for anyone who came late.

A horse supplement manufacturer used it to expand internationally without giving away a single share of her business.

The tool was the same. What changed was the understanding of it.

Most founders I speak to are still sitting on strong cash flows, fundable businesses, and real growth opportunities - and doing nothing with them because debt makes them nervous. That nervousness isn't protecting them. It's just costing them.

Debt deployed into a business with recurring revenue, a scalable model, and a clear plan isn't a liability.

It's an accelerator.

The question isn't "should I avoid debt?"

It's "do I have the strategy to make debt work for me?"

If you've read this far, you probably already know debt makes sense for your business. You've seen what it did for Netflix. You've seen what it did for a profitable business that almost gave away equity out of fear. The numbers aren't the problem. The mindset is. And that's the bit only you can change.

So if you're sitting on a profitable business and still avoiding debt out of habit - what exactly are you waiting for?

Till next time,

James