Taking Risks With Other People’s Cash
There is an old financial term called OPM, Other People’s Money. It describes the way that business owners and managers obtain funds from other people to leverage the capital that they put into a business. It is a legitimate way to help finance operations and investments. Just as physical leverage can be used to lift more weight, financial leverage can enable an organization to engage in larger investments and expansions of operations by borrowing resources from others. It lengthens the metaphorical lever of finance. When things work out right, a relatively small investment can have an ...