In short, you’re charging the highest interest rate to those whose businesses do better than you expected and the lowest rate to business who underperform your projections.
As such, you’ve created a financial incentive to underperform, and are entering this business of lending money by literally penalizing the least risky borrowers and rewarding the riskiest borrowers.
When you incentivize something you get more of it.
Your borrowers know their business better than you, and you’ve provided them with a mechanism to exploit that asymmetry in information.
You sort of have to assume that your incentives will be effective: the customers who have the most reason to believe they are growing faster than baseline will avoid your product and those who are pessimistic will embrace it, greatly increasing your default rate.