IRA GAYLL ZAMUDIO
Imagine you are an owner of a small enterprise servicing other businesses. You have been running your company for 12 years now with a lean team of 20. The business is experiencing a spike in demand, your team is willing and able, but your resources have been held up in earlier projects so you cannot accept new ones. You realize you need capital. If the expected profit from a new project is greater than the interest rate your bank charges for a loan, it makes sense to take out a loan from the bank to service the order.