With bank lending, the effect is temporary, as the loan is paid back, and money destroyed then.

• money is created by loaning and destroyed by repayment
  
• therefore: no debt => no money
  
• but, in addition, in order to repay the loan with interest, more money needs to be in circulation at any given time than existed previously, or failing that a fraction of the loans need to be defaulted on
  
• therefore, the total amount of debt must continually increase, or there must be a continual stream of defaults in your "steady state"