The debt ratio measures the proportion of assets paid for with debt. One can use the ratio to reach conclusions about the solvency of a business. A high ratio implies that the bulk of company financing is coming from debt; this is a risky financial structure, since the borrower is at risk of not being able to pay for the associated interest expense or paying back the principal. A low debt ratio reflects a conservative financing strategy of using only equity to pay for assets. Lenders and creditors use the debt ratio to estimate the amount of lending risk they will incur by extending credit to an organization. They are more likely to lend when the debt ratio is closer to 0% than when the ratio is closer to 100% (or more).