>Another thing I forgot to mention - if the expected value of a loan is 99 cents on the dollar, then this is a bad loan to make at the onset. It should never be

>Another thing I forgot to mention - if the expected value of a loan is 99 cents on the dollar, then this is a bad loan to make at the onset. It should never be made, and never would be in the private sector. It'd be a good loan to make if the business development subsidy took the form of a tax break instead. If the government agreed to halve it's taxes on that particular business venture, there'd be 109 cents on the dollar worth of value to divvy up between the lender and the entrepreneur. I actually don't know if subsidized access to capital is better for business development than preferential tax treatment.