> One reason is that someone’s or a company’s income doesn’t always align perfectly with when they want to buy things.
Financing should be used for things that provide value over the time horizon it takes to earn the money to fully pay for them. If you finance things for less than that time horizon, you just end up getting more and more underwater. If you finance something that delivers value for ~6 hours then you probably shouldn't be buying that thing or your fiscal solvency is really headed for the cliff.
What’s the source of this “should”, and why doesn’t it apply to the majority of businesses that finance the cash flow to sustain short-term operations?
Maybe because the virtual zero-interest rate policy from the Federal Reserve skewed the market in ways is "should" have not gone?
Would a business to this if they were paying more interest than the revenue generated from the time of the loan period? Or would they take a deep and hard look at their operations and decide that maybe the CEO doesn't get as big a bonus this year?
Sure, it makes sense to finance business expansion or whatever but if they are/were just floating some capital which has nothing to do with their core business of making widgets then this clearly falls into the "should" category.
Financing should be used for things that provide value over the time horizon it takes to earn the money to fully pay for them. If you finance things for less than that time horizon, you just end up getting more and more underwater. If you finance something that delivers value for ~6 hours then you probably shouldn't be buying that thing or your fiscal solvency is really headed for the cliff.