{"ok":true,"canonical_url":"https://dealroom.so/glossary/5-cs-of-credit","api_url":"https://dealroom.so/api/public/glossary/5-cs-of-credit","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-of-credit","term":"5 Cs of credit","aka":"5 Cs","group":"Reading the business","definition":"A framework lenders use to evaluate a borrower's creditworthiness: Character, Capacity, Capital, Collateral, and Conditions. This is how lenders assess your ability to repay and the risk involved.","what_it_means":"Your SBA lender will analyze your deal using the 5 Cs. Character assesses your credit history and integrity, Capacity looks at your ability to generate cash flow for debt service, Capital is your equity injection, Collateral provides security, and Conditions are external factors. Prepare strong financial projections and a solid business plan to demonstrate these.","url":"https://dealroom.so/glossary/5-cs-of-credit","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"}],"related":[{"slug":"creditworthiness","term":"Creditworthiness","url":"https://dealroom.so/glossary/creditworthiness"},{"slug":"repayment-capacity","term":"Repayment capacity","url":"https://dealroom.so/glossary/repayment-capacity"},{"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":"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":"How does a lender calculate the upfront guaranty fee for an SBA 7(a) loan of exactly $5,000,000 for FY2026?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-calculate-the-upfront-guaranty-fee-for-an-sba-7-a-loan-of-exactly-5-000-"},{"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"}]},"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 of credit","url":"https://dealroom.so/glossary/5-cs-of-credit","source_type":"DealRoom Data"}}