This is an interesting emergent behavior of our current financial system.

Generally speaking, access to credit is treated more importantly than possession of capital, due to the leverage credit provides. For individuals however, it is treated negatively (the more credit you have registered with the credit-reporting agencies the less future credit will be extended to you) while for businesses, because they generate income, it can be treated positively. This is generally because credit-granting institutions often do not perform a deep enough analysis to determine if credit utilization in a business is leading to organic or artificial growth; it's a difficult task to perform, and the difficulty is compounded by the long time scales it can sometimes take before the determination of organic-vs-artificial can be pronounced. Simply possessing sufficient credit to take control of assets until someone else pays more for the assets induces all sorts of "fake-it-til-you-make-it" games.

Throw into this cauldron of unintended consequences the official and quasi-governmental support (which boils down to more credit extended for these activities) for real estate development, medical care, and education, and it is small wonder we see the kinds of unbalanced stresses we observe in banking, housing, medical and education sectors.

An especially egregious example of this in action in the US are the "limits" on number of financed properties secured through government mortgage assistance programs. The layperson could be excused for believing that the mortgage assistance programs are meant for "the little guy", and the limit would be one financed property per household, owner-occupied. The taxpayer foots the bill, so it should only be for families and individuals who need the government-stabilized mortgages for the house they live in, right? What actually happens is there are a complex set of rules between Freddie Mac, Fannie Mae, FHA and VA programs that delivers government support for taxpayers to subsidize hundreds of thousands of "investors" to get taxpayers to supply the mortgage assistance for up to about 10 properties, only one of which needs to be owner-occupied, up to a $2M aggregate loan value.

In HN-terms, it is as if there was a taxpayer subsidy that let you put up 10% of a $2M loan for your startup idea, dis-chargeable in bankruptcy, at credit rates you could not touch in the private markets. The scrutiny hurdle to clear to secure this financing is much lower than for YC; it's mostly taxpayer money that's at risk and the agency problem runs rampant here. This is an outright gift to the banks that originate the loans and service them for the origination and servicing fees but don't underwrite the risk, as well. You should have heard the cries of doom and gloom when the government agencies a few years ago mulled dropping the number of investment properties that could be carried. Most of these "professional investors" are oblivious to how real businesses obtain credit, and the real cost of credit in the private markets.

There are no easy answers here, unfortunately. Credit is a legitimate feature of the modern economic landscape, and a bona fide tool in an honest business' toolbox.