That in itself is reasonable. However governments choose to encourage it with tax systems that mean you pay less tax by increasing debt. This is the main thing that breaks capital structure irrelevance: https://moneyterms.co.uk/capital-structure-irrelevance/
reply> As a business owner, if you want cash today because you are done with a business. You could go to a bank and get a loan to pay dividends.
If you are a business owner you could borrow yourself using the business as security.
but then you would need to keep running it, what if you don't want to do that anymore? how do you incentivize someone to keep it going to pay off the debt you just borrowed outside of the llc.
replydeleted
reply