Debt Is a Tool the Way a Loaded Gun Is a Tool
Scripture: Proverbs 22:7 • Romans 13:8 • Deuteronomy 28:12 | Episode 16 | Approx. 7-min read
Here’s a sentence you’ve probably heard from a banker, an investor, or a business school professor: debt is just a tool. Use it wisely and it builds your business.
The problem with that sentence is not that it’s false. It’s that it’s only half true — and the half it leaves out is the half that has destroyed more businesses than any other single factor.
Debt is a tool the way a loaded gun is a tool. Yes, there are legitimate uses, and in the right hands it does what you intend. But it concentrates risk. It narrows your options in ways you don’t fully feel until you need those options. It creates obligations that don’t pause when your revenue does. And when things go wrong — which in business they eventually do, for everyone — the business with significant debt has far less room to recover than the business without it.
To be clear before we go further: I am not making the case that debt is always wrong. The Bible doesn’t make that case, and I’m not going to make it either. What I am making the case for — and what Scripture makes the case for very clearly — is that debt carries a weight most business leaders dramatically underestimate. And that weight has a name. Scripture calls it servitude.
What Debt Does to How You Lead
The first thing debt does is narrow your decision space. The business owner who carries significant debt obligations cannot make the same decisions as the one who doesn’t. When a key employee needs a compensation adjustment, the heavily indebted owner may not be able to respond. When a strategic opportunity appears that requires capital, they may not have access to it. When a difficult client relationship needs to end because it’s costing more than it’s producing, the heavily indebted owner may not be able to afford to walk away. Debt doesn’t just constrain finances. It constrains judgment — every decision gets filtered through whether you can afford it rather than whether it’s right.
The second thing debt does is transfer power. When you borrow, you create a relationship with your lender that is structurally not equal. Your lender has claims on your assets, your cash flow, and in some cases your personal finances that you do not have on theirs. They have covenants you must maintain and remedies they can exercise if you don’t. The decision to borrow is a decision to introduce a party into your business who has significant power over it — and that party’s interests are not always aligned with yours.
The third thing debt does is concentrate risk. Every business operates in uncertainty. Revenue can fall, clients can leave, markets can shift. The business that carries substantial fixed debt obligations has converted variable uncertainty into fixed exposure — the debt payment is due regardless of whether revenue arrives. The same disruption that a debt-free company weathers as a difficult quarter becomes, for a heavily leveraged company, a potential existential event.
None of this means borrow nothing. It means borrow with your eyes fully open to what you’re taking on. And most leaders don’t. They evaluate debt against the interest rate and the projected return, and they miss what Proverbs names as the most significant cost: the servitude.
The Borrower Is the Slave of the Lender
Proverbs 22:7 (ESV):
“The rich rules over the poor, and the borrower is the slave of the lender.”
This is one of the most economically precise statements in all of Proverbs, and it names something that is functionally, operationally true in every creditor relationship.
The Hebrew word translated “slave” is ʾebed — the same word used throughout the Old Testament for the servant, the one whose activity is directed by another’s will. When Solomon uses this word to describe the borrower’s relationship to the lender, he is not being hyperbolic. He is being accurate. The borrower’s financial decisions, business decisions, and sometimes personal decisions are constrained by the claims of the one who holds their debt. They cannot sell certain assets without permission. They cannot take on additional obligations without disclosure. They cannot restructure operations without the lender’s awareness and sometimes approval. That is a form of directed activity. That is ʾebed.
For the steward who is managing someone else’s resources, that’s a significant consideration. The question before borrowing is not just “can I afford this?” The question is “is it faithful stewardship to introduce this level of obligation and this degree of lender authority into the management of what I’ve been entrusted with?”
A Posture of Clearing Accounts
Romans 13:8 (ESV):
“Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.”
This passage has generated more debate than almost any other when applied to financial questions. Does Paul mean Christians should never borrow? The honest answer is probably not, in the sense of a universal law. The Greek ὀφείλετε — the command form of “to owe” — is better understood in its context as an ongoing posture rather than a one-time prohibition.
What this passage establishes is a directional principle: the goal is to owe as little as possible, as briefly as possible, and to treat debt as a burden to be discharged rather than a tool to be accumulated. The posture is toward freedom from obligation, not toward leverage. The business owner who carries debt as a permanent operating strategy and thinks of it simply as a cost of doing business has adopted a posture that moves in exactly the opposite direction from what Paul describes.
Lender, Not Borrower
Deuteronomy 28:12 (ESV):
“The LORD will open to you his good treasury, the heavens, to give the rain to your land in its season and to bless all the work of your hands. And you shall lend to many nations, but you shall not borrow.”
This passage comes from the covenant blessings of Deuteronomy — Moses laying out before Israel the consequences of faithfulness. And here, inside the list of blessings, is this: you will lend to many nations, but you will not borrow. God’s picture of a thriving people is a people who are lenders, not borrowers. People with enough — more than enough — to extend to others rather than reaching toward others’ surplus to cover their own needs.
The image God paints of flourishing is instructive: the direction is surplus, freedom, the capacity to give rather than the obligation to repay. The aspiration for the faithfully managed business is not to maximize leverage. It’s to build toward a position of such stability that it can be the lender, the giver, the source of blessing to others. That’s a long-term vision. But it’s worth knowing where the target is, because the target shapes every decision on the way to it.
When the Covenant Called the Loan
A manufacturing business owner — Thomas — built his company over eight years using debt aggressively. A conventional growth strategy: borrow to buy equipment, borrow to fund inventory, borrow to take on contracts that required upfront capital. At the peak, revenue was strong and the debt load was substantial but serviceable. He had three different lenders with different terms and covenant requirements, and managing those relationships had become a part-time job.
Then a major client representing about a quarter of his revenue went through their own financial difficulty and slowed payments to ninety days. Thomas’s cash tightened immediately. He needed a short-term bridge. He went to his lenders. Two of them discovered in the process that he had been out of compliance with a debt covenant for the previous quarter — a technical violation he hadn’t noticed. One of them called the loan.
Thomas hadn’t done anything wrong. He’d built something real. He’d served his clients well. But he had borrowed heavily and handed portions of his decision-making authority to three parties whose interests, at the moment of stress, were not aligned with his survival. He spent the next eighteen months restructuring, at significant personal and financial cost, a situation that a less leveraged version of the same business would have navigated as a difficult quarter.
The business survived. But the lesson was permanent: the cost of debt is not just the interest rate. The cost of debt is what you hand to someone else when you sign.
Two Practices This Week
First — do a full accounting of what your debt is actually costing you. Most business owners know their interest payments. Fewer know the full cost. This week, sit down and answer three questions about every significant debt obligation your business carries. What are the covenant requirements, and are you currently in compliance? What decisions does this debt prevent you from making freely? And what does your lender’s covenant require of you that you would not otherwise do? That last question is the clearest measure of the servitude. The things you are doing or not doing because of your lenders’ requirements — those are the ʾebed relationship made visible.
Second — set a directional goal toward financial freedom and make one move toward it this week. Deuteronomy 28:12 gives you the target: the lender, not the borrower. A business in a position of surplus and freedom. You may not be there. Most aren’t. But are you moving toward it or away from it? Identify one concrete move: an accelerated principal payment, declining a credit facility you’ve been offered, restructuring a line to reduce ongoing obligation. Or simply a decision to stop treating leverage as a default growth strategy and start treating it as a concession — something taken on reluctantly, discharged as quickly as possible. One move. This week.
Episode 16 of Profit and Principle — “The Danger of Debt in Business” — is available now on Apple Podcasts, Spotify, and wherever you listen. The companion PDF includes the debt cost accounting worksheet and the covenant compliance checklist.
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