Many lenders evaluate the potential of small business owners using a framework called the five C’s of credit. It is important to have a good understanding of what lenders are looking for in order to have to best chances of getting approved for business financing. The 5 C’s are:

·        Character: How responsible you are with repaying your debt
·        Capacity (Cash flow): Ability to pay what you borrow
·        Capital: The assets you have, if you have savings where you can make payments from
·        Collateral: If you apply for secured credit and the collateral is an item not cash the lender will be concerned what the condition of the collateral is.
·        Condition: Situations that affect your ability to make payment. Situations beyond your control. For example, the pandemic and it’s effects on the economy.

These five components make up a credit analysis to help the lender determine credit worthiness. By knowing each of the “5 Cs,” you will have a better understanding of what is needed and how to prepare for the loan application process.

To learn more, please join me on 2/25 to learn more about financing your new ApexNetwork Physical Therapy clinic.