Isn't Low interest rate business loans similar to subprime mortgages. Many are in for a rude awakening with interest rates going up. Combined with import tariffs and spending slow down, the increase cost of doing business may spell disaster. Here we go again ... https://www.forbes.com/sites/lauras...-compared-to-subprime-mortgages/#525980199288 https://money.cnn.com/2018/04/03/investing/stocks-debt-borrowing-costs-libor/index.html
No. Subprime mortgages were given to people with no chance of paying them back or potential revenue to back the loan. Small business loans have are expected to allow for investment that will have a payback. Low interest reduces the burden on the borrower as it takes time for the intended investments to pay off.
I didn't make up the number but they say 70% fail within 10 years... https://lendedu.com/blog/what-percentage-of-small-businesses-fail/
subprime loans are non-recourse. Small business loans are often laden with personal guarantees. So a business failure doesn’t mean that a bank will lose out. If you take a 300k loan for your house, you just deliver them the keys and walk away if you can’t pay. If you take a 300k loan for your business, they take your business assets and if that’s not enough to cover the loan, they then go after your house and your Ducati.
And if that is not enough, it's similar to subprime. BTW go tell a corp that, they get called on loans frequently