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Debt End Ahead?

Don't let debt put your business in a tight spot--learn how to use leverage to your advantage.

This story appears in the July 2004 issue of Entrepreneur. Subscribe »

The ancient Greek mathematician Archimedes once said that with enough leverage, he could move the entire world-if he only had a place to stand. Like Archimedes, some entrepreneurs seem to believe that with enough financial leverage-a euphemism for debt-the moon and stars will align, and their business success will be assured. But like Archimedes, those same entrepreneurs are often left without a place to stand.

To be sure, some succeed. Mike O'Brien pledged his own home, his brother's home and more when he needed to cover more than $1 million in organizational costs for his third business, FinancialAid.com. And Seth Frey racked up six figures of personally guaranteed debt as he built a million-dollar mail order business called Granny's Goodies.

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