Borrow with an Exit Plan

Debt can feel like a tightrope—exhilarating if you balance it, scary if you don’t. One of my biggest lessons? Always borrow with an exit plan. Let me tell you about a time I almost missed this memo and how it changed my approach to debt forever.

Early in my entrepreneurial journey, I took on a bank loan to fund a startup. The pitch was slick: borrow now, and if the business took off, lenders could swap their loan for equity or I could just pay them off. Sounded perfect—until the startup didn’t soar. I hadn’t planned how to repay if things went south, and I ended up dipping into savings to cover payments. It almost left me broke and that was a wake-up call.

Fast forward to last year: I used a line of credit at a no cost EMIs to buy equipment to kick start our content creation journey. This time, I was ready. I knew the loan payments formed a very small portion (less than 10% of my active income), I had borrowed only what I needed at almost no interest. It helped start our content creation at the right time and the debt was paid off in 6 months.That’s debt with an exit plan—knowing exactly how you’ll pay it back.

Here’s the takeaway: Never borrow without a roadmap. Whether it’s a student loan for a degree with strong job prospects or a business loan tied to a revenue-generating project, map out how the debt will pay for itself. Keep your debt-to-income ratio below 25% and steer clear of high-cost traps like payday loans. If you’re considering convertible debt, ensure your plan accounts for both success and fallback scenarios.

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