If the supply of loanable funds increase we see the interest rate declines and more businesses will borrow money and make more investments. If the demand for loanable funds decline, interest rates will fall in order to get more business to borrow money. Remember economic profit is total revenue minus total explicit and implicit cost. An accountant overstates economic profit because they ignore implicit cost. Normal profit is what the entrepreneur needs as a minimum payment to stay in their current line of work.
Normal profit is the cost of using the entrepreneurs ability in the firm.
Profit is often in excess of a normal profit because the entrepreneur takes risks when they start their business. Profit is the reward for taking these risks. Profit also rewards the entrepreneur for being innovative. It is the profit potential that causes entrepreneurs to start businesses.