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5 C’s To Consider When Giving Credit To Business Clients

1.       CHARACTER: This is considering customers attitude or character before granting loan or facility.

2.       CAPACITY: This is checking customers’ ability or capacity of repayment in terms of his or her daily, weekly or monthly cash flow or turn over.





3.      CAPITAL:  This is checking customers’ initial capital or working capital before granting loan because bank facility is not meant for startup business but to argument working capital.



 4.     COLLATERAL: This is considering the security pledge against the facility requested for so as to know if the collateral is worth the amount demanded for as facility.





However the collateral or security pledge should be 120% of the amount requested for and collateral is a secondary factor to be considered, while character stands as the primary factor to consider.

5.     CONDITION: This is considering the purpose of taking the loan i.e what kind of business the customer wants to use the loan for and other conditions surrounding the facility.

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