Finance
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Finance
THE FIVE Cs OF CREDIT: (1) CAPACITY (2) CAPITAL) (3) COLLATERAL (4) CHARACTER (5) CONDITIONS.
OF THE "FIVE Cs" WHICH DO YOU SUPPOSE IS THE MOST IMPORTANT TO LENDERS? PLEASE PROVIDE YOUR REASONING FOR YOUR SELECTION OF WHICH OF THE "FIVE Cs" IS TYPICALLY MOST IMPORTANT TO THOSE THAT LEND MONEY TO ENTREPRENEURS? WHAT IS YOUR REASON FOR YOUR SELECTION OF WHICH OF THE "Cs" IS MOST IMPORTANT TO LENDERS?
While an ideal recipient of credit has ample reserves of all of the five Cs, the most important consideration when lending money to an entrepreneur is if the individual or the entity has the capacity (or ability) to repay the loan. Any prospective lender wants to know if he or she will get his or her money back! To evaluate the entrepreneurs capacity for repayment the lender will consider the cash flow from the business, the timing of the repayment, and the probability of successful repayment of the loan. Payment history on existing credit relationships - personal or commercial- is considered an indicator of future payment performance. Potential lenders also will want to know about other possible sources of repayment, or to what other lending agencies or individuals the entrepreneur
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