Five cs of obtaining credit, Financial Management

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.

Posted Date: 10/17/2012 3:36:11 AM | Location : United States

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