These are very valid points, if a user who needs the funds can not pay it back later then his REP will be ruinned and he will be flagged by steemfund account and probably by users who invested and didnt get any returns.

At the moment I have had a couple of petition from people I believe can´t pay it back.. so far it is pretty subjective on my part to decide who can and can´t pay it back... it is mainly based on their SteemPower.. if they can powerdown to pay back the loan then its safe to lend them the money and if they don´t pay it isnt because they couldnt but because they didnt want to.