No, it doesn't look to me like you're missing anything. I would say, maybe, loans would be made on large projects where return was great, such as energy plants. If the loan was denied, people could more easily save up the capital themselves to invest in a small project. This could encourage more small businesses, innovation and competition if people don't have to take out credit to start a business. There would probably be fewer people buying lattes on credit.

Business owners wouldn't get tricked by the ready availability of credit into misallocating resources on long-term projects like housing where there wasn't genuine demand represented by savings. So by the time all the people who should have gone into science got done building the houses out of the material that should have gone to say, solar panels, there would actually be people with money to buy the houses, instead of now where everyone is bankrupt, had no savings to begin with, or no longer has credit. Jesus Huerta de Soto explains this well: http://www.youtube.com/watch?v=uF9RG3hyBZU