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Borrowing Money For Your Business

Borrowing Money For Your Business. The Six ‘Cs’ of Granting Credit. Character. Stable employment history Credit references Track history of saving Good credit rating Good asset mix. Financing Tip. B.D.C. Loans. 1 st C. Capability. Management of business Professional background

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Borrowing Money For Your Business

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  1. Borrowing Money For Your Business The Six ‘Cs’ of Granting Credit

  2. Character • Stable employment history • Credit references • Track history of saving • Good credit rating • Good asset mix Financing Tip B.D.C. Loans 1st C

  3. Capability • Management of business • Professional background • Relevant training • Previous business experience • Business plan Financing Tip C.F.D.C. Loans 2nd C

  4. Context • S.W.O.T. Analysis • ‘Three legged stool’ • Operations • Marketing & Sales • Financial Financing Tip Angels & Factors 3rd C

  5. Capacity • Ability to pay • Positive cash flow • Total debt servicing (TDS) ratio rule of thumb is 40% of total income Financing Tip C.S.B.F. Program 4th C

  6. Capital • Positive net worth • Good debt to net worth ratio • Liquidity and ease to convert • Available contingencies Financing Tip Supplier Loans 5th C

  7. Collateral • Security for debt • Equipment, mortgages and personnel guarantees • Acceptable terms, clauses and conditions Financing Tip Love Capital 6th C

  8. Recommendations • Verify your credit report • Invite banker to your business • Begin with your own branch • Shop around • Know your plan inside and out • Do not embellish data • Demonstrate own commitment • Keep your banker informed

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