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Five C's to getting a loan

The five C’s of Credit are; Capital, Capacity Collateral, Character, and Conditions. These are the necessities to getting a loan when presenting your business plan to the bank or lender. When presenting to the loan agency the C’s are what he/she is looking for in your delivery, to give them a sense of security in there investment. To make sure that they feel this way you should approach them with pure confidence in your self and your proposal. A small business must have a stable capital is to ensure the lender that the borrower has a large portion of there own assets in the company. If the owner didn’t have the capital. This will show the lender that during the starting stages and the rough patches in the venture you are willing to support your own small business. Capacity or cash flow to the loan agency is to make sure there investment will be a safe one. You must convince the lender that you have the ability to meet your obligations in repaying the agency back on a regular basis. Collateral is important to a loan agency, because they need security in knowing it can retrieving there money from your personal or business assets if necessary. This shows dedication to the lender to ensure your wiliness to succeed or rep the consequences. If you are unable to repay the lender its monthly payments or the failure of your business, they have the right to seek your assets as payment. Character of the owner is very important to the lender, because they have to be satisfied with your judgment skills and with your ambition to succeed. You are frequently evaluated on your honesty, integrity, competence, polish, determination, intelligence, and ability. This is where your confidence in presenting your business plan is important, because it reflects strongly on your character. The investors or lenders consider the market trends and the potential growth of competitors. Also they look at your location, and your strengths and ...

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Five C's to getting a loan. (1969, December 31). In DirectEssays.com. Retrieved 19:25, September 16, 2014, from http://www.megaessays.com/viewpaper/14642.html