But vision takes guts. Schwartz displayed his by taking out a $6 million loan from the financing arm of Harley-Davidson to bring his vision to fruition. And while things look great today, that can change overnight, and Schwartz is well aware of the risks. "Harleys," he says, "are essentially a luxury item, not a primary means of transportation. Rises in interest rates or a change in economic conditions could significantly change the demand for our product." Or, he adds, the cyclical nature of the market could turn against him before the business is ready to handle it.
So what happens to entrepreneurs who take out a business loan under one set of circumstances, only to have things turn bad down the road? Do they have to lose their business? That depends on how well the entrepreneur manages the process of a so-called loan workout with the lender, says A. Barry Cappello, a borrower's rights attorney in Santa Barbara, California, who has more than 19 years' experience representing businesses.