Bankers will want to review your personal and business credit history before loaning you any money. It would be good for you to take the time to review your personal and business credit history before approaching the bank to ensure that there are no inaccuracies. If there are inaccuracies, get them corrected before going to see your banker. This paves the way for developing a trusting relationship with your banker and business success.
EXPERT TIP | Gary Furr, Organizational Development Consultant:
As a business owner, you should understand the principles of credit that your banker is using to judge your credit worthiness. The five C’s of credit are character, capacity, capital, collateral, and conditions. Understanding and utilizing the five C’s of credit builds trust with your banker, and every lasting relationship relies on trust.
Let’s look at two of the five C’s.
Capacity: Do you have the capacity to repay the loan? Banks and bankers obviously want the money they loan to be repaid—and they want to see that you have the capacity to do so. If your debt-to-equity ratio is too high, your capacity to repay the debt is too low and it is unlikely you will get a loan.
Capital: What kind of capital are you willing to put toward securing your loan? Any contribution by you the borrower helps to reduce the risk of default. Do you have personal wealth or assets that can be used as a secondary repayment source through the sale of the pledged asset?
With over 40 years of C-level business experience and an MBA in organizational development, I am uniquely qualified to help you achieve success in your business. Give me a call to set up a free consultation: 503-312-3145.
--- END POST ---