If the company reaches that limit, there may be things it really should do, but can't. On the other hand, if the company gives up too much equity in exchange for capital, you may lose the right to determine what to do with that capital since you will no longer control the company. No one has come up with a way to determine the best capital structure for businesses in general. The rule that does work is to match the expense with the appropriate style of capital. For instance, a company should not borrow money to pay its workers.
Wages are an ongoing cost.
The workers will have to be paid every week. No company could afford, or would be able, to continuously borrow funds for that purpose. Dividend payments are used to compute the cost of equity capital, but they don't usually figure in the cost equation for small businesses. A growth company is not expected to pay dividends. In those cases, how expensive equity capital turns out to be depends on how much of the company the founders are prepared to give up in their purchase of capital.