Plenty of cleaning business owners take pride in owing nothing. They’ve paid off the trucks and equipment, and nobody at a bank has a say in how the company runs.

Steve Mastin, chief financial officer of 4M Building Holdings in St. Louis, knows owners like that. He described a friend, a local businessman who pays cash for every piece of equipment he owns. That approach lets his friend sleep at night, and the business is doing very well. Mastin has still encouraged him to think bigger, whether that means expanding or buying out a competitor.

Mastin has spent much of his career leading private equity-backed companies, and he looks at borrowed money differently. Used wisely, he explained, debt can make an owner more money than they ever thought possible.

Victor Lizano, co-owner of Amazing 360 Commercial Services and a bank vice president, put it plainly. “Credit is either leverage or debt,” Lizano said. “It’s not one or the other. It’s how you use them.”

Where your cash is really sitting

Lizano teaches Hispanic entrepreneurs how to access capital. He tells them bootstrapping is admirable, though businesses in the United States have long grown on other people’s money. One example he uses is an $80,000 rig that has been paid off. It looks beautiful, he noted, but the owner’s cash is now stuck inside it. Financing the rig and putting $70,000 into the company’s people and operations would put that money to work.

Mastin brought the idea down to a cleaning company’s level. An owner who finances a pickup truck and a floor scrubber instead of waiting to pay cash can hire another technician and take on more floor work right away. That one move might add $40,000 to $60,000 a year in sales.

“Everybody in this room can sell. That’s the power of debt,” Mastin said. The loan still has to be repaid, he added, but it can act as a multiplier for the whole business.

Lizano prefers to call it something else. “I like the word investment,” he said. “You’re leveraging credit as an investment in your company.”

The one question lenders care about

Banks size up every borrower with the same five Cs: character, capacity, capital, collateral and conditions. Those questions don’t change whether the request is for $10,000 or $200 million.

Most of it comes down to debt service, or whether the business generates enough cash to make the payment. Mastin used a robotic vacuum to show the difference between looking profitable and being able to pay. The robot replaces labor and raises gross margin. Its cost gets depreciated over 36 months, which keeps it out of EBITDA and makes the financials look strong. A lender doesn’t care about any of that, Mastin said. If you borrowed $50,000, the only question is whether you can pay it back with interest over 24 or 36 months.

Lenders will also stress test the business, and owners should run those numbers first. Customer concentration is a big one. Lizano described a contractor who gets 30% of revenue from a single client.

“I’m going to say that client gives you half of the business they gave me last year,” Lizano said. “Can you still make the payment with half their business gone?”

Seasonal companies need to show a cushion for slow months, and every borrower should know how rate changes hit the payment. On a $1 million loan over 36 months, a jump from 8% to 10% adds close to $1,000 a month, or more than $33,000 over the life of the loan.

Clean books open doors

Many small owners run personal expenses through the business to lower their tax bill. Lizano said the lender reads that same return, and a leased luxury car on the books makes the company look less profitable than it is. Owners planning to borrow should sit down with a reputable tax professional a year ahead. They may pay a little more in taxes to show stronger margins, which is cheaper than amending returns or waiting another year for a loan.

He recalled a customer who bought a $1 million building with cash drawn from personal and business accounts. The accountant recorded it as an operating expense. Real bookkeeping software and monthly financials, kept organized and ready to share, make that conversation far easier. A fractional CFO costs money, Lizano said, though it is worth it for an owner about to take on a major expense.

Ask when times are good

The worst time to ask for credit is when you need it. An owner who has maxed out a credit line and watched sales flatten sends every warning signal a banker looks for. Lizano’s advice is to go when everything smells like roses, with healthy financials and a clear plan for the money.

Specificity matters. A request for a vague marketing budget won’t get far, while $8,000 for a convention and $2,000 for a targeted ad campaign gives the lender something to evaluate. If the plan changes, a quick call helps. An owner who tells the bank that Facebook ads aren’t converting and the money is moving to LinkedIn is showing good stewardship, and Lizano said most bankers will respond with congratulations.

Waiting until the last minute leaves everyone scrambling. Lizano described owners who show up with a contract starting in days and needed the money yesterday. “You’re not giving me any time,” he said. A banker wants the business to succeed, since a healthy borrower is how the bank gets repaid. Giving that relationship time to work is the easiest way to get a yes.