Your business is important - not just to you, but to us. Understanding the "Five C's of Credit" increases the chances of getting approved for a loan.

When you apply for an SPC business loan, we take time to analyze your information using the "Five C's of Credit".


Make sure your business plan demonstrates your business’ ability to repay the loan, as capacity is the most critical of the five C's. You must discuss exactly how and when you intend to repay the loan. Not only do you need to state your revenues and expenses, but you also need to indicate the amount of your cash flows and the timing of your cash flows with regard to repayment. SPC will look at your past repayment history, both business and personal. Don't forget to indicate every possible source of repayment at your disposal in your application.


Capital, in this context, represents the owner's investment in the business. Before applying for a loan, the owner has to have a significant investment in the business before a lender will even consider making a business loan. SPC will look carefully at the amount and quality of capital the owner has to offer.5 c


Collateral is a distinct relationship to capacity. Collateral refers to forms of security you can provide to your bank or other lender. Collateral may be buildings or equipment owned by your small business or by you personally, including your home. Collateral may also include a guarantee by someone, in case you cannot repay the loan, the other party will. There is a chance that SPC will require loan guarantees in addition to collateral. You may know loan guarantees by the term "co-signer." Other types of collateral, such as accounts receivable and inventory, may qualify you for a lower annual percentage rate or lower maximum Loan-to-Value.


Conditions are two-fold. First, conditions refer to the overall economic climate and external environment surrounding the lender and the business firm. It is important for the small business firm to present an iron-clad loan application to the lender. The second part of conditions refers to the intended purpose of the loan. Are you buying new equipment for expansion?  Why do you need the money? Spell it out in detail in your loan application.


Character is often a subjective judgment made by the lender about the prospective client. SPC decides if the client is trustworthy with regard to repaying the loan and generating a return on the investment. This is where the education and experience of the client comes into the picture. Your references and background in your industry are considered by Summit Peak Credit.