15 Apr 2013

5 C’s of Debt Collection

Organizations channel the creative, entrepreneurial spirit of full of energy people into vital product or service, while creating valuable jobs for any nation. During challenging periods, it is important for these company owners to understand all facets of credit.

These are the a few “C’s” of credit that could determine whether a company receives a commercial mortgage:


The “Character” of the business is the moral integrity from the owner and employees. This could include the standing of the firm in the community. What is the quality a higher level products and/or services which can be delivered by the corporation? Companies with strong character receive lower rates on their commercial financial products.

A company must demonstrate a good “cash flow” or “revenue stream” that is to be used to repay the commercial loan. The amount of this cash flow is the “Capacity” of the business to fulfill its debt obligations.

Financial institutions and lending institutions may audit the financial possessions (cash, equipment, and property) of the company seeking the commercial loan as a way to determine the “Capital” or net worth from the business. Whether or not the commercial loan is used for investment that improves the capital of the business is additionally a factor in measuring business capital.

“Conditions” means both the details (or terms) written in the financial contract, the specific market for the company’s offerings, and the state from the overall economy. The details of the contract – monthly interest, repayment schedule, and default penalties – will dictate every time a commercial debt collector is going to be contacted.

For a “secured” professional loan, the “Collateral” involves the equipment, machinery, and property that is to be surrendered if debt obligations aren’t fulfilled.

A company that needs a commercial loan have to satisfy all five of these criteria just to be deemed “worthy” of important capital. Once companies properly understand every one of the facets of credit, they will be more capable of preventing commercial commercial collection agency due to loan default.