I don't see that mercenaries are a whole lot worse than large standing armies. If nothing else, you can shut them down just by turning off the money. Very hard to do that with actual troops.
Or alternatively, find yourself having to deal with a large group of well-armed people who suddenly find themselves out of work and pissed off, and who lack the sense of national loyalty that proper soldiers have.
I say, then, that the armies with which a prince defends his state are made up of his own troops, or mercenaries, or auxiliaries, or of mixed troops. Mercenaries and auxiliaries are useless and dangerous. If a prince holds on to his state by means of mercenary armies, he will never be stable or secure. Mercenaries are disunited, ambitious, undisciplined, and disloyal. They are brave with their friends; with their enemies they are cowards... they have no love nor other motive to keep them in the field than a meagre salary, which is not enough to make them want to die for you. They love being your soldiers when you are not waging war, but when war comes, they either flee or desert...
Mercenary captains are either excellent men, or they are not. If they are, you cannot trust them, since they will always aspire to their own greatness, either by oppressing you... or by oppressing others against your intent; but if the captain is without ability, he usually ruins you...
We see from experience that only princes and their republics armed with their own troops make very great progress, and that mercenaries cause nothing but damage.
NB, by "auxiliaries", he means foreign troops sent by a foreign state, in response to a request for aid. He disapproves of these because while (unlike mercenaries) they can be very effective, relying on them can leave you at the mercy of the state that sent them.
NB2, although off-topic for this discussion, I'll just mention that Machiavelli cites Switzerland and Sparta as examples of states whose long-standing freedom was a result of their well-armed citizenry.
