Collateral – Strength of the security, including value, location, nature and saleability.
Character – Credit worthiness / credit rating of the borrower, assessed by a credit check, their previous experience, and any references.
Capital – Ability of the borrower to repay the loan, and their access to liquid capital from their own sources should additional capital need to be contributed to the project.
Capacity – Ability of the Borrower to service the loan. Servicing could be achieved through their salary, other business income, prepayment of interest, or a provision within the project. In the absence of loan service capacity, then there must be a firm and reasonable exit plan.
Conditions – both borrower and investment specific, considering sector and external influencers.
