The 5 Cs of credit: A business lending perspective

Questions to consider when applying these metrics to business loans.

“The 5 Cs of credit have been around a long time, and they’re still rock solid,” says Dana Sumner, president/co-founder of Development Finance Training and Consulting.

But how they’re categorized and considered during the business lending process differs somewhat from consumer lending, he tells students at the CUNA Business Lending Certification School Wednesday in Madison, Wis.

He offers questions to consider when considering each of the “Cs” for business lending.

1. Capacity

Does the business demonstrate a history or project an ability to make payments from operating income?

How does the borrower source and use cash? Do you understand how all debts affect the borrowing group?

 

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