by Black Cosmopolitan Editors
April 29, 2025
Taking out a loan can feel risky. But playing it safe can mean staying small
Written By Morgan Hewett
Bootstrapping your business feels safe. You’re relying on your own savings, reinvesting profits, and avoiding debt. I get it—I took pride in pinching pennies when I launched Options MD, my health tech company. But here’s the hard truth: bootstrapping can become a trap. It might keep the lights on, but it can also keep your growth dialed way down. If you’ve ever felt like you’re running in place while the competition speeds ahead, it might be time to rethink the “do-it-all-yourself” playbook.
You Deserve Financial Peace of Mind
We glamorize the image of the founder sleeping on a friend’s sofa, surviving on ramen noodles while chasing a dream. But let’s be honest: that stress can be crushing. And in my experience, that kind of pressure didn’t sharpen my creativity –it stifled it. Financial stress creates mental clutter. What helped me think clearly and build boldly wasn’t struggle—it was stability.
External financing gave me the breathing room I needed. It allowed me to pay rent, eat well, and focus on the bigger picture. You deserve that same peace of mind. You deserve to build your company without sacrificing your well-being. External financing isn’t just about scaling your business—it’s about supporting yourself in the process.
When Bootstrapping Falls Short
Bootstrapping is fantastic—for certain types of businesses. A tutoring service or consulting side gig can grow slowly and steadily, one client at a time. But other ventures need serious capital upfront. When I started Options MD, I wasn’t a clinician or engineer, but I needed both on my team. That meant hiring top talent early. Bootstrapping wasn’t going to cut it.
Loans let you buy time and speed. In a fast-moving world, waiting to self-fund growth can mean watching competitors fly past you. With a loan, you can invest now—in talent, marketing, or infrastructure—and reap the rewards faster.
Loans Can Be the Smarter Play
If you can’t—or don’t want to—raise VC money, loans are a powerful alternative. Consider this: if you raise $100,000 from investors at a $1 million valuation and sell for $3 million, your investors walk away with $300,000. But if you take a $100,000 loan at 6% interest, you’ll pay about $118,000 over three years. That’s a $182,000 difference in your favor. And you keep full control.
I was fortunate to tap into my network and raise $6 million in venture capital. But by the time we were acquired, I had given up 50% of the company. And while VC funding can accelerate growth, it’s not free money. With investors come governance boards, monthly updates, and the feeling that you have a boss.
Facing the Fear of Loans
Many entrepreneurs fear loans because of personal guarantees. Yes, SBA loans often require them. But that doesn’t mean you’ll lose everything if things go wrong. Many states protect your primary residence. And alternative loan products exist with slightly higher interest rates but no personal guarantees.
There are trade-offs, but also options. Equipment financing, revenue-based loans, and working with Community Development Financial Institutions (CDFIs) can all reduce personal risk. The key is borrowing wisely, with a clear plan to turn capital into growth.
Bet on Yourself
Taking out a loan can feel risky. But playing it safe can mean staying small. Bootstrapping teaches resilience, but scaling requires capital. Don’t let fear hold you back from growth. Bet on yourself and build something that lasts.
RELATED CONTENT: Faith, Pricing and Bootstrapping—Financial Literacy for A Healthy Business
