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Thinking About a Small Business Loan? Use the '7 Cs' to Prepare

Todd Rinehart May 8, 2024
Small business owner working on his computer pulling together information to apply for a small business loan.

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As a small business owner, you wear all the hats – sales, marketing, accounting, human resources – and you are busy. We at Crews Bank & Trust understand that your time is valuable, and we respect that. If you are considering a loan for your business, we want to make the application process as quick and easy as possible for you. Before you go to the bank to inquire about qualifying for a loan, do your homework. It will save you time when it comes to applying and make it easier for the lender you speak with to determine which type of loan would be your best option.

In reviewing your business for a loan, our lenders typically use the '7 Cs of Credit' process to determine if you would qualify for a loan and the best loan option for your business. If you pull this information together prior to speaking with the lender, the process will be much faster. (It will also reflect well on your business knowledge, referred to in the first step below!)

Let’s look at what information you’ll need:

  • Character
    Do you have any bankruptcy, foreclosures, or judgments against the business or your personal finances? Also consider your references, education, and overall business knowledge.
  • Cash
    Determine the amount of verifiable cash available.
  • Collateral
    What are you proposing to use as collateral (assets that could be used as another method of repayment)? Examples would be equipment, real estate, inventory, accounts receivables and securities.
  • Credit
    Know your credit score and payment habits. Any late or outstanding payments can impact your credit score.
  • Capacity
    Evaluate your cash flow - can you support the debt a loan will create? Share any past loan payment history or additional sources of income that may be used to pay back the loan.
  • Conditions
    What are the economic conditions in your market?
  • Capital
    Calculate your net worth and assess if you have enough cash to make a downpayment.

Prepare for the meeting or phone call with a solid business plan and clearly explain how you intend to use the loan. Forecasts and projections should be reasonable, backed by a strategy for growth and contingency plans for different scenarios. Be honest in your evaluation and upfront with the lender – they succeed when you succeed.

Once you’ve collected all this information, reach out and let's get started, call us or stop into your local branch to talk with any one of our experienced commercial lenders. We can give you fast, straightforward information and help you secure a loan, with no surprises.

Your business is important to you, and you are important to us. Our goal is to deliver the highest level of excellence, with a hometown touch and we’d be honored to help you and your business grow.

Loans subject to credit approval

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