Tweet

You Can Get a Loan- Meet the Five C’s of Credit

Guest post by: MIchael Daley

Article Overview: Building a relationship with your lender is as important as meeting the five C's of lending. Knowing the five C's of credit will get you prepared for the loan process. Take a look.

You Can Get a Loan- Meet the Five C’s of Credit

Lenders grant credit based on "the five C's": capacity, character, collateral, capital and conditions. In other words, they want to know if your business can afford to repay the loan (capacity); are you the kind of person who is likely to repay the loan (character); what's left for the bank if the business cannot repay the loan (collateral); your ultimate net worth (capital); and how the current economy and local business forecasts might affect granting credit (conditions).

In today's tight lending arena, lenders do not want to take risks and all they want to know is if your business goes under how they can get their money back.

So here are some details on the five C's:

• Capacity is usually presented in the form of a cash flow forecast.
• Character is a look at your credit report.
• Collateral is cash or hard assets the bank can convert to cash to get back their loan if your business goes under. In some states, like Texas, you cannot use your home as collateral.
• Capital or your net worth is determined by the business balance sheet and occasionally your personal one too.
• Conditions can be fully explained in a business plan. A business plan would be very beneficial for the lender to understand how the loan will be used, to illustrate what results are expected, and to provide a synopsis of your industry's growth expectations.

When considering a new loan or lender, ask similar questions of them. Determine the three C's of any lender's offer: Is it the right size loan (capacity); does it have the right repayment terms/fees (character); and does it come with the best ancillary benefits (collateral). Don't forget that even if the loan is right for you, the lender might be wrong. Find one with a solid reputation who offers you some other tools that can help you run your business.

In the end, a long-term relationship with a lender you can trust, and who learns to trust you, whether it be a large national bank, a local community bank, or a credit union, will pay off in better credit, and more of it.

Related Articles
  Guaranteed Car Loans
  Anyone Can Get A Car Loan With Bad Credit
  How to Get a Online New Car Loan with Bad Credit
  Bad Credit Auto Loans - Proper Solution for Your Online Car Financing
  What Is A Credit Score?
  Bad Credit Car Loans - Getting a Auto Loan Financing With Bad Credit
  What is Bad Credit Used Car Loans and How to Apply Online Car Loan?
  Get a Guaranteed Approved Auto Loan for No Credit History
  Bad Credit Student Loans
  Find Car Loan Advantages with Bad credit
  How to Get an Car Loan with No Credit
  Get a Auto Loan & Car Loan Financing for People with Bad Credit history
  InstantCarLoan Provide New and Used Car Loans for all Credit History
  Get Guaranteed Bad Credit Car Loans & Auto Financing for Used and New Cars
  Small Business Loans Bad Credit
  Get a Auto Loan with No Credit History
  Sage Wisdom About Borrowing Money For Your Small Business
  Small Loans with Bad Credit in Australia
  Why A Good Credit Score Is Important To Your Business
  Used Car Loans With Bad Credit - Get Approved in 60 Seconds Or Less!

Article Tags: bank, business loan, capacity, capital, character, collateral, credit, credit union, five cs, lenders, lending, loan, relationship



Related Forum Posts
Re: Quick Ways To Utilize SEO Effectively - 1. If you dont want too much competition from other SEO's, choose your keywords precisely.For example, Instead of keyword Loan choose keywords like Bank Loan, Equity Loan, Student Loan, Home Loan etc. Order of keyword also matter for search engines. Search engine treats ?Loan Equity? and ?Equity Loan? as different keywords. 2. Best seo practice is to get at least one of your primary keywords in domain or sub domain name of your website. You can use hyphens (-) to separate multiple keywords. For example: seo-service, seo-guidelines, free-seo each cover two keywords. 3. Get your second or third keywords in your directory name and filename. 4. Keep your webpage free from any syntax error, declare document type at the beginning and validate your HTML and CSS because search engine don?t like pages with too many errors. 5. Give a short Title in of your page in 3-9 words (60-80 characters) maximum in length containing your primary keyword. Remember it will be displayed in search results so choose wisely. 6. Try to include your most important keyword phrases in heading tags on your page if you can but keep in mind it should not be exactly same as title of your page. You can use (H1 H2 H3) tag for specifying anything important. To reduce size of heading use CSS. 7. Specify Meta keywords in heading of document. Limit it to 15 to 20 words. Although not all the search engines give importance but there is no harm doing it. Search engine like Yahoo still give it importance. 8. Write Your Meta Description tag attractive containing keywords because it will appear on the search engine result pages. 9. Use text for navigation menu instead of using images or Java scripts. 10. Try to include your most important keyword in hyper linked text and text and text that immediately precedes or follows the hyperlink. Do not use same keyword always use synonyms at few places. Just like instead of seo, I have use search engine optimization at many places on this page.
Building credit - Credit is like reputations, I suppose. Takes a lifetime to build, and only a second to destroy.
Marketing and PR ideas related to a Credit Organization - Hello Everybody! I would be very grateful if you suggested some PR and Marketing ideas for a Credit Organization which target market is poor public who live in village and haven't any access to the internet. Thanx in advance
Offer Credit instead - I'm not sure if ChrisH was referring to this but i'll state it more expicitly .. Charge upfront and offer a refund of double the value back in "Credit" towards your Product or Service you have for sale at the end of the event.
Research & Dev Tax Credit - at No Cost (Canada) - Brian, I have a colleague that can provide you guidance and even assist in maximizing a R&D Tax Credit from the Government of Canada (If you are Canadian). All this at No Cost to You. I know her well and have referred other people to her. She's got plenty of experience in the field. If you're interested (anyone else on this forum too) just send me a PM and I will share her details with you.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Sales Courage and Resilience

Ten Steps to Go from Idea to E-book for Sale

Adjusting Your World

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.