How to Master the 5 Cs of Business Bank Loans

Business loans
Commercial lending
SBA loans
Business lines of credit
Jim Reed, Executive Vice President, Commercial Banking
Coworkers looking at chart and discussing

If you are thinking about applying for a business loan, familiarize yourself with these five loan criteria (5 Cs), and be ready to discuss them with your banker:

Capacity: Capacity evaluates whether you can repay a loan. Do you have cash flow to make a payment? If your business is profitable, that’s a strong indicator that you have capacity. For an individual, be prepared to share personal financial statements for similar evaluation.

Capital: Capital means you are invested in the business and have some skin in the game. It’s OK to have debt, but at the end of the day you should also have equity in the firm.

Collateral: Collateral looks at assets that will secure the loan, like inventory, equipment or accounts receivable. As an SBA Preferred Lender, Banner Bank works closely with the Small Business Administration in cases where collateral may be a concern. Our SBA team members also have the experience and expertise to streamline the loan process.

Conditions: Why are you seeking a business loan? It's important to be open with your banker so we know all the pertinent information about your company and can better advise our clients.

Character: For Banner Bank, an applicant’s character is paramount. Are you a good operator? Active member of the community? Like you, banks want to do business with reputable companies, and people.

Of course, there are other factors in securing a loan, but preparing your information goes a long way in advancing the process.

What questions do you have about business loans? Visit our Business Loans page to learn more and connect with a local business banking expert.

Limited time QuickStep™ offer
With fast, in-house decision making for finance needs of $50,000 to $1 million, our QuickStep™ loan provides the agility you need. Now through May 28, 2021, Banner Bank is offering a special fixed rate fully amortized for up to 20 years:

3.50% for the first five years Φ

3.99% for the first 10 years Φ

Initial five- and 10-year rate includes 1.00% discount for auto-pay from a Banner Bank Business Checking Account. Rate to adjust to Prime + 1.00% following the five- or 10-year fixed rate. Loan to value up to 80%. Loan fee 0.50%. Appraisal costs not paid for by Bank. Borrower to pay closing costs. Financing subject to credit approval. Available for applications submitted between April 5 and May 28, 2021.

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