Five Cs of Obtaining Credit
The five crucial parts lenders examine previously issuing credit include:
1. Character. This is a calculation of the borrower's integrity as related to seeing the loan as an obligation that must be repaid.
2. Capacity. This is a calculation of a business's ability to create the cash flows needs to service the debt on hand.
3. Capital. This is a calculation of the borrowing firm's net worth.
4. Collateral. This is a calculation of the firm's assets available to privacy the debt requested.
5. Conditions. This is a measure of the conditions of the loan, as well as prevailing industry and general economic conditions that might influence the loan repayment.