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"The Seven C’s of Commercial Real Estate Lending Business"

lady / SBA loan
Lenders are in business to make money. When lenders loan money they expect it will be paid back on time. Lenders must consider seven C’s.

1 – Capacity to Repay Loan

The lender will consider the cash flow from the business to determine its repayment ability, payment history, and credit relationship are considered an indicator of future payment performance.


2 – Capital
The borrower is required to have adequate capital injection. Initial investments are very important factors when lenders want to get involved in any loan transaction. Different lenders have different requirements.

3 – Collateral or guarantees are additional forms of security you can provide the lender. If you can’t repay the loan, the bank wants to know if there is a second source of repayment. Some lenders may require guarantee in addition to collateral as security for a loan.

4 – Conditions focus on the intended purpose of the loan; will the money be used for working additional equipment or inventory?

5 – Credit
The lender will evaluate the borrowers previous experience and management expertise to study the ability to repay and past credit history.

6 – Character
Is the degree to which a borrower feels a moral obligation to pay his loan on time? It will be measured by their credit and payment history. The quality of your references and background are very important.

7 – Confidence
A successful borrower instills confidence in the lenders concern. Their loan application, credit, resume expertise and presenting themselves send the degree of professionalism with a good reputation, reasonable financial statements, good capitalization and adequate collateral.