Since the project is only borrowing and returning Hive with profits back to the DAO, I thought there would be no harm in borrowing more.

It still counts against the budget as if it were spending, even though it isn't. The budget is mostly tapped out. There is a small additional amount in the budget that is increasing over time and we'll probably make another proposal soon, but we can't just change the budget rules even though this isn't really spending.