But businesses are still stuck in the concept of loans. Its like you take a loan to buy your home(Or if I'm right its called mortgage in the US). Businesses pretty much run on loans. So things get super risky, when you factor in failure. Because lenders are expecting principle amount + interests in returns, and you have to often give some thing as a guarantee(for eg: a house, or a plot) which remains with the lender till you return the amount.

I think the trends are changing now. I heard a senior VC talk at a start up conference here in Bangalore. One of the main reasons why entrepreneurship never took off in India was because people had to deal with what-after-failure scenarios, and then it ends there. If the venture is too risky there is hardly any point trying.