Debt carries emotional weight — stories of failure, family warnings and fear. For this reason, many entrepreneurs avoid it like the plague, but it is important to know that even though debt can destroy a business, it can be a useful tool if you know how to use it. I believe the problem is not debt itself, but the way we think about it.
Over the years, speaking with entrepreneurs across Mexico and Latin America, I’ve noticed a pattern: we demonize bank debt while glorifying investor capital. But let’s think about it thoroughly, because that contradiction is worth revisiting. In my opinion, not all money “costs” the same. Let me explain:
There is a growing trend, especially among younger entrepreneurs, to seek funding from investors. It sounds attractive. Strategic. Modern. But what is this money really going to “cost” your business? How should we value this investor money? In my opinion, investor money is often the most expensive money any business can take.
In business, investors are not looking to make 10 percent returns — hell no! They are aiming for 30, 40, even 50%. Considering this perspective, you have to keep in mind that it is their money, so most probably you will be tied up with equity dilution, reduced control, and long-term value loss. One way or another, it will “cost” you and your company.
On the other hand, bank debt, when used correctly, can be considered far “cheaper,” and it could be the key to making the changes your company needs. But, in order to understand this concept, first we need to change our point of view regarding a very common misconception about interest.
Instead of considering interest as a “punishment,” we should consider it more like “rent.”
Removing the Emotional Burden
Looking at it from this perspective, we remove the emotional burden and use it in our favor. After all, we rent offices, homes, and equipment all the time. This isn’t really that different, so it shouldn’t really feel that different either. Seen this way, debt becomes less emotional and more rational.
Now that we’ve set fear aside, it is important to remember that debt should be treated with respect and responsibility. That being said, debt should not be used for unplanned spending; it should be used for building. If you use your debt money for luxury consumption that does not generate value, you will create a burden. But if you use it to invest in better locations, better customer experience and service, it becomes a very powerful tool.
Debt used for consumption is risky and negligible — in fact, it could be dangerous for your business — but debt used for investment can build a very powerful engine that creates value and generates the cash flow needed to sustain and grow your business. Replacing emotion with discipline and planning should be your focus. Entrepreneurs often ask: “How much can I borrow?” But that is the wrong question. The real question is: “How much can I repay?” At this point, being smart about how you use your debt money really matters, because you should calculate this according to your cash flow, not your ambition.
Moving on, we should be aware of time.
There is a powerful dynamic that many entrepreneurs overlook: your investment appreciates while your debt depreciates over time.
As inflation drives prices and revenues higher, the relative weight of your debt decreases. And as time goes by, what once felt heavy becomes more manageable, and eventually almost insignificant. Understanding this is key to seeing debt not as a burden, but as a strategic advantage.
With the right strategy and plan, by combining your capital with external resources, you can scale faster, expand sooner, and increase your return on equity. Growing a business with only your own capital is possible, but it is slow. Leverage allows you to “compress” time and push in the right direction. Leverage is not about “risk for the sake of risk,” but acceleration with intention.
Shifting the Balance of Power
Now, talking about banks — between us — you are not the only one who needs money. Entrepreneurs often believe they are at a disadvantage with banks because they are the ones asking for money, but banks are actively trying to place it. Lending is their core business. The more they lend, the more they earn, so your debt is very much their business. If we understand this dynamic, we can shift the balance of power. Seen from the right perspective, it can allow entrepreneurs to approach debt not with fear or insecurity, but with clarity, preparation, and confidence.
For me, the real challenge is not avoiding debt, but learning how to master it. Setting all emotions aside, debt is not inherently good or bad. It is a tool, and like any tool, its impact depends on the hands that use it. If it’s used without discipline, it can destroy — but if it’s used with intelligence, it can become one of the most powerful engines of growth.
At IOS OFFICES, we have lived this philosophy firsthand. We have grown organically, supported by the banking system, but above all through quality, passion, discipline, and a genuine desire to serve.
Over the years, we have built a community of more than 25,000 people who come to the office every day and return home happy. People who do not come merely because they have to work, but because they genuinely want to be part of the workplace.
We have transformed the connotation of the word “work” — from something associated with obligation, boredom, or necessity into something connected with passion, creativity, human connection, and the excitement of producing and building together.
At IOS OFFICES, people do not simply dress to go to the office; they prepare themselves as if they were going to a meaningful social event — a place to connect, collaborate, laugh, and share ideas with other human beings.
Because ultimately, growth is not only built with capital. It is built with people, culture, energy, service, and the courage to use every available tool — including debt — intelligently and responsibly.
And when used wisely, debt can become the engine that allows great ideas, great companies, and great communities to grow faster and farther than they ever could alone.
