If you can make a better yield than the interest you're paying on the loan, why not go for it?
The problem is the one you stated:
"It's a floating rate, tied to whatever prime does. But prime is not likely to move very fast. And in very small increments when/if it does. Heck, it might go down."
Trof, you know as well as anyone that it might go
UP, too.
If you can get that loan at a fixed rate, you'll have more peace of mind.
There are plenty of vehicles out there yielding 6% and higher these days. But none of them are CD's and damned few of them are Triple A bonds at Par and fewer still are well rated, short term paper. Certain MLP's and some of the Closed Ends that have been beaten up lately are yielding 7% and better, some MUCH better, but you risk losing ground on principal because of share price fluctuation. From what I've been seeing, you would be fairly hard pressed to find that "very safe, short term investments paying say a 6% return." "Very Safe" being the key words, here. You could locate 6.5% yield paper all day long but you would have to be willing to go with BBB notes or worse. I know you read a lot so you're aware that the bond market has tightened up considerably in the last 4 months. Having said that though, there are opportunities sticking their heads out in places you might not expect. The Muni market for instance. Plenty of decent, 4 & 5% coupon bonds out there from fiscally sound issuers have had their value bid down because of the difficulties AMBAC and MBIA et al are in. That doesn't mean they are necessarily more likely to default, just that traders see the risk as having increased, so the bonds are bid down. It makes for some interesting yields to be found, - all tax free - if one is willing to make some phone calls. If you can find a bond 2 years from maturity at 89 with a 5% coupon, your yield is going to be 10.5%. But if you found such a bond, you could almost guarantee its rating will now be BBB or worse.
Here is a nifty little bond calculator;
http://www.smartmoney.com/onebond/index.cfm?story=bondcalculatorIf the broker gets 20 Bps on the loan (and he will get near that, anyway) that's a cool five grand in gross commissions. He'll be your pal, for sure!