The Principle of 5 C to Develop Your Business
Want to develop business? You’ll need a capital. There are many sources of funding you can get from the nearest friend, parent, cooperatives, or banks.
But you need to remember, there is always accompanying requirements. Well, if you want to borrow capital from banks, these tips are useful. Currently banks will assess in accordance with the principle of 5 C, the character (character), capital (equity), collateral (security), capacity (capacity of business), and condition (business conditions).
For the character, include a commitment that built the business, business records such as suppliers, customers, and the history of banking. Banks will see if your business has a history of troubled loans or not.
From the capital side, the bank will see the capital needed for business. Banks can not provide 100 percent financing to businesses that make capital. There must be self-financing (own capital), whether it comes from paid-in capital or accumulated profits into capital.
Capital, among others, viewed from the composition of ownership that anyone, who the dominant currency, and who board the capital. This is important, because by knowing who is in control of this capital, the bank will know how to run a business continuity in the future.
Of this loan, the capacity of the proposed business is also a contributing factor. Bank, among others will see the results of sales, cost structure, cash flow, the velocity of charges and fees on income.
Banks lend capital, with the meaning of these banks are also wanting the sustainability of return on capital. In the proposal, the capacity of this proposed business is very important status.
For business conditions usually permissions is more important. To guarantee what could be guaranteed there are two types of collateral that can be used as collateral, that is tangible like equipment, machinery, vehicles, buildings, or land. As for the guarantees of such intangible personal or corporate guarantee as security provided credit insurance.
