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How to Get Money: The 5 C’s of Credit

[ 0 ] Sep. 24, 2013 | SBO Editor

Lenders often use the 5 C’s of Credit when they make decisions on whether or not to give a small business a loan. Here’s the breakdown on the 5 C’s:

1. Character: Does the person have a good history of paying off credit card debt and are they really serious about the business?

2. Capacity: Can the borrower really pay off the loan? What are their financial abilities to do so?

3. Capital: What financial condition are they in and how is it reflected in their financial documents, both personal and business?

4. Collateral: What security or assets does the small business owner possess?

5. Conditions: What are the economic conditions of the business owner’s industry or community? Does it look like a winner?

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Category: Features