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5 C’s of Credit


Have you ever asked the question, how do lenders see MY credit? Let me share with you how to obtain the much-needed credit. If you do not know the lending factors that can affect your personal or small business from getting the money to fund your business OR INCREASE YOUR BUYING POWER, then you are stuck in a rut. Let’s face it! Are you CREDITFIT, CREDIT WORTHY? What we do not want is you to continue going to payday lending, cash advances lenders -because these interest’s rates and payouts can get expensive. Are you paying attention to the 5C’s of credit? It does not matter if it is personal or business credit.

Character – Most lenders will run your credit report. Even non-bank lenders will also run a criminal check. They want to determine your integrity. Lenders want to make sure they are not making a mistake. If you know that as a borrower that something is there, it is best to share it.

Capital – What are you putting into the company. What are you trying to purchase? Are you putting something in the game? Are you making personal investment? Most businesses start with little to no credit. They normally go to family and friends to get started. Your next round may be crowdsourcing or raising more capital. What does your profit-loss statement look like to borrow money? It could be 10-30% depending on the lender

Capacity– The ability to pay back. What can you absorb? What can you leverage? An example – If you can service a loan with $500,000 with no mortgage and no job. Your house could be your leverage. They look at your personal income and your business income.

Collateral – Is something goes wrong how do we get our money back. Most lenders do not care about your personal assets- they just want their money back. The collateral is to encourage the borrower they want it back. They can suggest taking collateral on your home, building or car. They also look at your experience and your projections. How do you plan to pay back by using your assets? As an experienced lender with over ten years of experience, think very seriously about using collateral. If you do not pay back the loan, your personal assets will be at risk of loss.

Conditions – What is affecting the loan, economic and legal. What are the trends of the market? What is happening in the industry? What is consumer lending talking about? Make sure you stay up to date.

Disclaimer: Many lenders have their own preference for lending, interest rates and loan types. However, these are the typical 5 C’s for lending.