What are the risks?
Funds freezing by various institutions that hold part of my fiat funds is the main risks, but, beside being unlikely, I do manage it at my best. A high spike in BTC price could also hurt me, but because I mainly do arbitraging, only the profits (your interests) would be at risks. I could die also, but I'm young and in good shape so also unlikely
All in all that's not high risks against the reward.
It's great to see well-identified people propose deals with exposed business models, congratulations.
However, I don't understand how only the profits would be at risk in the example you gave, as shorting a position usually means that the possible loss is unbounded. If you borrow then sell 10 bitcoins at 9€/BTC and you have to buy them back at 12€/BTC, then you will be 2.7 bitcoins short (32.4€) of the 10.2 bitcoins you have to return to your creditor. If the price spikes to 18€/BTC, you will be 5.2 bitcoins short (93.6€). 90€/BTC (let's take the extreme) and you'll be 9.2 bitcoins short (828€), and so on.
(edited to add that the loss is potentially illimited in FIAT, added the corresponding amounts between parentheses)
One thing that is still unclear to me in your proposal would be the risks for the lenders. If, for example, there is a high spike in BTC price as you describe above, would you still be able to reimburse your lenders and pay the 2%, even if it temporarily costs you money to cover the potentially unbounded losses?