by Robert Gore
Imagine you’re running a business and you get a call from your bank. It is no longer going to charge interest on its loans, and you can borrow as much you want. You pull a list of capital expenditures and projects from your desk drawer. Zero percent interest makes much of the list feasible—expansion, better offices, new products and markets, more hiring, and so on. It’s just the shot in the arm your business needs.
Eighty-one months—almost seven years—later and you’ve crossed off every item on your original list plus ones you added after the bank’s phone call. Your first projects were solid successes, the next ones not quite as profitable, and the last few only marginally so or outright money losers. You’re worried. Turns out that you weren’t the only businessperson getting zero-interest-rate loans; everyone else was, too. Competition has become more fierce, because some of your fly-by-night competitors, who should have gone out of business long ago, have been kept alive. Although the bank isn’t charging interest, it’s time to repay the loan. You’re not sure you can do so without closing something and laying people off.
