Caveat: I work in data/risk management software in the financial sector. Also, I'm feeling a bit under-the-weather today, so sorry if this is less than coherent or comes off rambly.
When the GP says "give", I think they're aware that there are conditions built into that giving - I'd have a hard time believing they think bank loans are essentially gifts. But from the sound of your response, it seems you're against even this conditional-lending definition of 'give'...
So, following your logic... loans should be given to startup companies by institutions who *aren't* concerned about making a profit from the deal? Just wondering... why would anyone *with* money lend it to me (for the business I hope to start some day) if they had nothing to gain? Where should I go for capital?
If someone's willing to let me use their money now, on the hopes (which they share with me) that in the future, my business will thrive and I'll be able to pay them back with a bit on the side - I'll be happy for the deal! But there's the thing - do we really only want investors in ideas that "sound good" to someone at the bank, and which some lender personally can get behind (how would I find such a person for *my* business)? Realistically, a bank shouldn't care about me, nor my business - an investment system where the lenders line-item your expenditures and approve purchase-by-purchase aligned with my stated business plan would be a nightmare - our current system allows for banks to ignore the nitty-gritty details of my operations, assessing their risk by evaluating the market as a whole, my industry within it, my corporation within my industry, any past books we may have, potential collateral, etc... then charging me a spread above their costs to *get* the money they want to lend me. Perhaps if the government would just start lending directly to the people (at no interest as you seem to want?) we could have a functional world without interest-gatherers (and no inflation, too)... but for all sorts of reasons I don't see that going anywhere.
If I take their money, only to realize later that I'm unable to pay them back... well, we have courts for that to try to get them back at least what they gave me, but generally they'll go for the amount *I agreed to give them back*, regardless of whether I have that in liquid assets. I'd really rather not lose my house over it, but again - were they not able to take my assets as remuneration, you can bet your ass they'd either be out of the game (and not lending to just about anyone), or raising rates to account for all the non-payback.
So, parent poster; If you've got enough in the bank to cover the economy out of goodwill - please get to work. I'll call you first when I need $200k for brewing equipment, farm implements, and a robotics lab, and a commercial kitchen (yeah, my dream company will be that awesome). Thankfully, from the sound of things, you seem to think it's best not to charge interest, so you'll have the best rates around and will get all the business.
No, I don't think most financial institutions are well run, accurately measure risk, properly analyze any of the points I mentioned previously (or realize that their simplified models leave out lots of important real-world information - but that's another hours-long rant). *But* I think it's very clear that without some incentives (eg: a spread on every loan, and some gov't protection from too many people defaulting at once (asset seizure laws + trustworthy insurance + etc...)), nobody with money would have any reason to lend - only to spend. Trickle-down doesn't work well enough to make that a place I'd like to live.
