Excerpt from Term Paper:

.... reserves of all of the five Cs, the most important consideration when lending money to an entrepreneur is if the individual or the entity has the capacity (or ability) to repay the loan. Any prospective lender wants to know if he or she will get his or her money back! To evaluate the entrepreneurs capacity for repayment the lender will consider the cash flow from the business, the timing of the repayment, and the probability of successful repayment of the loan. Payment history on existing credit relationships - personal or commercial- is considered an indicator of future payment performance. Potential lenders also will want to know about other possible sources of repayment, or to what other lending agencies or individuals the entrepreneur owes money. (The Five Cs of Credit Analysis, MBDA, 2004).
Capital is the money the entrepreneur personally has invested in the business and is an indication of how much he or she has at risk should the business fail. But even if not much is personally at risk, if the individual has the capacity to repay the loan, the lender may take a chance. Having collateral is even more important than capital, as it enables the lender

Need this essay? If it's not quite what you're looking for there are over 50,000 more to search from, so you can find the term paper or essay that meets your needs.