C for Yourself: The 5 C's of Creditfrom Compliance4all
The first four C's-capacity, conditions, collateral, and character- evaluate a borrower's ability to repay, but character forces the lender to examine closely the borrower's willingness to repay.
Why you should Attend: Bankers have relied on the 5 C's of credit-capacity, conditions, collateral, capital, and character for many years, but what do these terms really mean, and how do lenders use them to determine whether a potential borrower is creditworthy? This simple credit model is simple to understand and easy to use. Attend the session to C for yourselves.
Areas Covered in the Session:
Capacity measured by the ability to repay from cash flow
Conditions evaluated in terms of how borrowing needs change over the business cycle and what makes some industries more vulnerable to downturns than others
Collateral analyzed in terms of relative liquidation values
Capacity considered in terms of the borrower’s equity cushion and the degree of relative leverage possible
Character assessed in terms of willingness to repay as evidenced by payment history as well as tips for fraud prevention (from )