When doing business in the U.S., thoughts about debt seem to differ a bit from when living in Korea.

In Korea, debt is often seen as something that should be paid off quickly, and ideally, one should avoid it altogether.

However, after observing business people in the U.S. for a long time, I realized that it's not always the case.

I know someone who received a whopping $600,000 line of credit from a bank.

It's a logistics company in New Jersey, and their monthly revenue never drops below $5 million, but even so, when you think about it in Korean won, it's a staggering amount.

When I first heard about it, I asked, "How do you plan to pay back $600,000?"

The person was surprisingly calm. "I'm not borrowing to pay it back; I'm borrowing to make money."

At first, I thought it was just some fancy talk that American businesspeople like to use.

But after a few years, I saw that their business had actually grown nearly fourfold.

Of course, they didn't just borrow $600,000 and spend it freely. They already had an established business with stable revenue and income.

The issue was that to grow the business further, they needed money upfront.

They needed to hire more people, buy equipment, secure inventory, and invest operating capital to land big contracts.

In simple terms, they might win a $100,000 job, but they need to spend $50,000 first to do that job.

Customers pay 30 or 60 days after the job is completed, but employees don't wait and say, "Please pay me once we get the money from the customer."

This is where the line of credit comes into play.

They can withdraw $100,000 when needed and pay it back once the receivables come in.

When a big project comes in, they can use $200,000 and pay it back once they receive the funds.

So, the $600,000 isn't just a simple debt; it becomes a tool that expands the operational capacity of the business.

After seeing this, I began to understand why people doing business in the U.S. talk so much about "leverage."

It's not just about doing $200,000 worth of business with only $200,000 of your own money; it's about using credit and cash flow to take on bigger projects.

However, there is a very important premise here: borrowing money doesn't automatically mean the business will grow.

If you borrow $600,000 to decorate a fancy office, buy a nice car, and hire unnecessary employees, that's not leverage; it's just a $600,000 expense.

On the other hand, if you already have customers and a business structure that generates more cash than you invest, credit can significantly accelerate growth.

The person I know was exactly that case. They didn't save a failing business with $600,000 because they were out of money.

They injected money into a business that was already doing well but lacked capital to take on bigger contracts.

As a result, they hired more people, increased the number of orders they could handle, grew their revenue, and based on that performance, they could secure even larger deals.

After a few cycles like this, the size of the business nearly quadrupled in just a few years.

If this goes well, it's great... Who wouldn't want that? The problem is that it can turn the other way, and that's scary.

If revenue doesn't come in but interest accrues, and if clients pay late, leverage can start to choke you.

If variable interest rates spike in just 1-2 years, the interest burden could become heavier than expected.

So, a line of credit seems similar to a double-edged sword.

In the hands of a skilled chef, it's a wonderful tool, but if anyone swings it around, it can lead to disaster.

Looking at the result of growing a business fourfold with a $600,000 loan, one might think, "Should I try that too?"

But what really matters is not the $600,000.

What's crucial is where that money was invested, how quickly it was recouped, and how much was left after paying interest.

Ultimately, doing business in the U.S. teaches you that there are two types of debt.

There's debt that feeds you, and there's debt that you have to feed.

Businesspeople need to be able to distinguish between the two.