The 7 “C’s” of Credit - SME Toolkit Caribbean (2024)

Provided by theInternational Finance Corporation

1. Capacity

Do I have experience running a business? Have I had this business for more than one year? Do I know this industry well? Do I have a good team working for me? Is the business operating well?

2. Cash Flow

Is my business profitable? Do I have a bookkeeping system that will allow me to demonstrate this to the bank? Can I produce financial statements from this data? Is my cash flow sufficient to make the loan payments?

3. Capital

Do I have sufficient reserves, or other people who could invest in the business, should unexpected problems or hard times arise?

4. Collateral

Do I have collateral (business and/or personal) which I can offer? Is the property I own mine, or do I share it with my husband or family?

5. Character

Can I show the bank that I am honest, and keep my promises? If I’ve had a loan or supplier credit before, did I always pay on time? Have I always paid my personal bills on time? Can I prove this to the bank? Do I have good references?

6. Conditions

Is the industry that I am in a good one? Do I have a unique product or service which makes me different from my competitors? Is there growing demand for my products? Does a loan make sense for my business?

7.Commitment

Am I committed to working hard so that my business will succeed? Do I really want it to grow? Have I put my own money into the business?

For more resources

How to apply for a loan (video)

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