A New Credit-Induced Boom Coming Soon?

Yesterday's discussion of a credit-induced boom - referencing the Irish real estate boom - continues with something going on here in the U.S. Some banks in some areas are loosening up credit and offering loans to businesses at the lowest rates businesses have ever seen:

Carl DelPrete, chief executive of suburban New York supermarket chain Uncle Giuseppe's Inc., couldn't be happier with the current lending environment. To fund a recent expansion, he got bids from three banks and calls the terms on the $14 million loan "the best we're ever going to see in our lifetime."

The article focuses on banks, and questions the wisdom of this lending:

The surge in loans to businesses is raising worries that lenders are competing so aggressively that some will pay for their largess down the road.

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But we should also question the wisdom of the businessman here. Are the rates so tempting that this CEO is borrowing based on the cheapness of money? Perhaps he already had plans to expand. If so, perhaps this decision will prove to be a good one. But it's really tempting to the businessman considering an expansion to act just because money is cheap. All of a sudden, a plan that was marginal becomes a great plan. 

We're witnessing what happens when government distorts the interest rate by driving it lower, as we've seen since 2008. I hope things work out for this guy. But you have to wonder if he's just grabbing the money because it's cheap.