How the wealthy use debt to get richer, two CAs explain

Time of India

7 days ago

In a growing shift in India's business mindset, financial experts have highlighted how the wealthy utilise debt as a tool to grow faster, build larger enterprises, and create long-term wealth. Chartered Accountants Vishnu Gupta and Prakhar Gupta, both project funding specialists, say that while most business owners avoid borrowing due to fear or lack of knowledge, India's top entrepreneurs have long used structured debt to expand operations and capture new markets. They argue that the right kind of borrowing, when aligned with business growth, can become a key driver of success.
Debt as leverage, not liability
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According to them, the main difference between how average businesses and wealthy businesses operate lies in their use of capital. 'Entrepreneurs stay small not because they lack ideas but because they rely only on what's in their bank account,' said CA Vishnu Gupta. 'The wealthy don't use their own money to build empires, they use other people's money in a structured, planned way.'
This approach, they say, allows them to access larger projects, hire talent, and scale faster without diluting ownership or waiting for profits to build up over time.
Why avoiding debt can limit growth
CA Prakhar Gupta explained that many small and medium-sized businesses (MSMEs) in India stay cautious about loans due to fears of financial stress or past bad experiences. However, he added that debt, when matched with cash flow and growth plans, is not a burden. 'Borrowing is not about desperation. It's about direction,' he said. 'If you borrow with a clear outcome and repayment strategy, you can build assets, grow revenue, and lead your industry.'
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CAs Vishnu Gupta and Prakhar Gupta, who have recently launched their debut book — How the Wealthy Borrow to Win — argue that access to capital is no longer the problem; awareness and mindset are. Many entrepreneurs continue to run profitable but under-scaled businesses because they are unwilling to take calculated financial risks.
Lessons from wealthy business owners
The wealthy, they point out, focus more on return on capital than cost of capital. 'They measure every rupee borrowed by what it can generate,' said CA Vishnu Gupta. 'If taking a ₹1 crore loan helps build a ₹5 crore revenue stream in two years, that's good borrowing.'
They also use instruments like project loans, asset-backed finance, and revenue-based funding. Importantly, they structure these borrowings in a way that matches the lifecycle of the business and its risk profile.
Strategic borrowing
is a skill
The two experts say financial institutions are ready to lend to businesses with clear plans, strong execution, and predictable cash flows. What's often missing is the skill to plan that borrowing correctly.
They believe India's family-owned businesses, service professionals like doctors and architects, and even startup founders can benefit from adopting a more structured approach to borrowing. 'It's not about taking on more debt. It's about using the right debt, at the right time, for the right reasons,' said CA Prakhar Gupta.
A shift in thinking for Indian businesses
The conversation around debt is slowly changing in India, especially among younger entrepreneurs and second-generation business leaders. But the experts believe much more awareness is needed.
'Smart borrowing separates companies that grow from those that stall,' said CA Vishnu Gupta. 'It's time Indian entrepreneurs stop treating debt as a danger and start treating it as a driver.'