Sometimes what one sees as a problem someone else sees as good. A case in point follows. Considering that most small businesses fail is it wise to lend to a small business? Or is it wise to borrow to start a business? CIT is an example of what happens to companies that lend to small businesses. Many people have huge amounts of debt that they incurred starting a business. I would submit that selling ownership of the business is a better way to raise money than borrowing. True most of the firms will go bust but the investor will make up for it if he invests wisely through equity growth. By lending you can lose everything you lend but your upside potential is very limited. An equity seeking firm may well be more sophisticated than a firm that just wants to borrow money. Also an equity investor may well investigate the firm that he invests in more than a lender will.