Debt is a tool for matching the timing of cash. Used correctly, it aligns the cost of an asset with the period over which that asset produces. Used incorrectly, it forces a five-year asset to be repaid out of nine months of cash flow.
Common mismatches
Short-term, high-frequency capital funding equipment or a build-out. Stacked positions taken during a liquidity squeeze. A revolver permanently drawn to cover a structural gap. A term loan funding a seasonal cycle.
Restructuring is a lever
Re-terming obligations to match the assets and cash flows behind them can materially change monthly liquidity without changing anything about operations. In many businesses, that is the highest-leverage financial move available.