Thank you for clarifying some of the points I was trying to make. The issue is not about a single lender and debtor, but about the rate that the market will set.It would be easier for a church, farmer, or supermarket owner to get a loan in this scenario than in our current system where rates are artificially low and inflation is high. Traditional lenders aren't compensated for their risk to an actual market level. So they REALLY make it difficult to initiate a loan.
As @JScott alluded to, the true equilibrium for interest rates on a lot of this stuff is a LOT higher than bank rates would suggest. This is why I would wish someone good luck trying to get a business loan from Chase or Wells Fargo unless they clearly don't need it.
The idea that market rates actually make it easier to get a loan is very analogous to the minimum wage issue.
If minimum wage is $15/hour, then many low skill workers will never be able to get a job because they are truly not worth $15/hour. Just like today you can't get a business loan at 1% if the lender would really need to charge 8% to make the deal work.
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