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The 5 C’s of lending: what to know before asking for capital

INDIANAPOLIS (WISH) Before taking the steps to secure funding on a new business, there are a few important things to consider. Matthew Murphy III, Founder of Emboss Partners, talks about what entrepreneurs should do before asking for capital.

Murphy recommends networking and familiarizing yourself with a banker before you ask for their services. Business owners are really selling themselves and their ability to drive results, so getting to know other businesspeople is a good precedent for the lending process.

There are 5 C’s of lending that bankers consider when you present them with your business.

  1. Character: personality, reputation, accountability
  2. Conditions: the conditions of the business’ industry
  3. Cash flow: measurable, repeatable, sustainable cash flow
  4. Collateral: secondary source of repayment if cash flow fails
  5. Capacity: the ability to return the bank’s investment