A law that prohibits any individual from accumulating more than ten millions or from making more than one million a year restricts the activities of precisely those entrepreneurs who are most successful in filling the wants of consumers.If such a law had been enacted in the United States fifty years ago, many who are multimillionaires today would live in more modest circumstances.A fixed-rate loan payment remains the same because the interest rate is constant; a variable-rate loan requires a different payment amount when the interest rate changes.A lender may establish an SBA loan with interest-only payments during a company’s startup or expansion phase; the business then has time to generate income before making full loan payments.Yet the problems involved are social problems; they must be appraised with regard to their social consequences.What matters is neither the happiness of any Croesus nor his personal merits or demerits; it is society and the productivity of human effort.
The SBA charges the borrower a prepayment fee only if the loan has a maturity of 15 years or more and is prepaid in the first three years.
Often, a small business uses the cash from a term loan to purchase fixed assets such as equipment for its production process.
A term loan is for equipment, real estate or working capital paid off between one and 25 years.
Let us, for the sake of argument, accept this psychology.
But on what else is the power of a businessman founded than on his wealth?