{"ok":true,"canonical_url":"https://dealroom.so/glossary/5-cs","api_url":"https://dealroom.so/api/public/glossary/5-cs","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"5-cs","term":"5 Cs","aka":"Character, Capacity, Collateral, Capital, Conditions","group":"Reading the business","definition":"The 5 Cs are the fundamental criteria lenders use to evaluate your creditworthiness and the viability of your loan application. They assess your ability and willingness to repay.","what_it_means":"For an SBA 7(a) loan, your lender will scrutinize each of the 5 Cs. Character refers to your track record (credit report, good character). Capacity is the business's ability to generate cash flow for debt service. Collateral is what secures the loan. Capital is your equity injection, and Conditions are the overall economic and industry factors.","url":"https://dealroom.so/glossary/5-cs","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"good-character","term":"Good character","url":"https://dealroom.so/glossary/good-character"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"}],"related_questions":[{"question":"How long does an independent business valuation typically take for a $1.5 million acquisition?","url":"https://dealroom.so/sba-7a/questions/how-long-does-an-independent-business-valuation-typically-take-for-a-1-5-million-acquisiti"},{"question":"If I refinance my SBA 7(a) loan after 5 years, do I still face prepayment penalties?","url":"https://dealroom.so/sba-7a/questions/if-i-refinance-my-sba-7-a-loan-after-5-years-do-i-still-face-prepayment-penalties"},{"question":"When is an E-Tran modification required for a final loan amount change less than $5,000?","url":"https://dealroom.so/for-lenders/questions/when-is-an-e-tran-modification-required-for-a-final-loan-amount-change-less-than-5-000"},{"question":"What if the seller is retaining a small percentage of ownership (e.g., 5%) after the sale?","url":"https://dealroom.so/sba-7a/questions/what-if-the-seller-is-retaining-a-small-percentage-of-ownership-e-g-5-after-the-sale"},{"question":"Can a seller note with a 5-year full standby period be considered part of the equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-note-with-a-5-year-full-standby-period-be-considered-part-of-the-equity-injec"},{"question":"Will a past bankruptcy (e.g., Chapter 7 discharged 5 years ago) automatically disqualify me from an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/will-a-past-bankruptcy-e-g-chapter-7-discharged-5-years-ago-automatically-disqualify-me-fr"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — 5 Cs","url":"https://dealroom.so/glossary/5-cs","source_type":"DealRoom Data"}}