Comment by gortok

I’m going to give you just one way that a business could do just what I’m saying.

Did you know there are whole businesses that lend money through ‘receivables financing’? Basically if you have outstanding invoices, you can get the money for those invoices now, and you pay (let’s say) 15% in interest to get that money now. https://www.allianz-trade.com/en_US/insights/receivables-fin...

All else being equal, your profitability just went down by 15% taking that receivables loan; but businesses are willing to lend money at varying degrees of interest while the company that took that money still looks like they’re in great shape if you were to look at their revenue, but 2 or 3 of these sorts of advance loans can hurt a company really quickly.

The issue is that it takes a long time, if a business is engaging in shady business practices, for them to be held accountable (if they ever are), and there are lots of ways to keep a business afloat while effectively robbing Peter to pay Paul.