List the "5 C's of Credit" and explain their impact on borrowing ability.

What will be an ideal response?

The "five C's of credit" are:

?The borrower's character.  Banks look for strong character and reasonabe ability.?The borrower's capacity to repay the loan.  The lender wants some assurance there will be a steady flow of cash from the business to provide repayment.?The capital being invested in the venture by the borrower.  Lenders want borrowers to have a personal interest in the form of invested capital that is at risk in the business.?The conditions of the industry and economy.  Lenders look for trends that indicate the business is likely to succeed.?The collateral available to secure the loan.  Lenders prefer their interests be protected by collateral that can be recovered and sold if necessary to recoup their principal.

Business

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