{"ok":true,"canonical_url":"https://dealroom.so/glossary/three-c-s-of-credit","api_url":"https://dealroom.so/api/public/glossary/three-c-s-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":"three-c-s-of-credit","term":"Three C's of Credit","group":"Reading the business","definition":"These are Character, Capacity, and Collateral—the core factors lenders assess when evaluating a loan application. Understanding them helps you see the deal from the lender's perspective.","what_it_means":"Lenders use the Three C's to gauge your ability and willingness to repay an SBA loan. Character relates to your credit history and experience, Capacity is your cash flow, and Collateral is what secures the loan. You need to demonstrate strength in all three.","url":"https://dealroom.so/glossary/three-c-s-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"},{"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":"borrower-risk","term":"Borrower Risk","url":"https://dealroom.so/glossary/borrower-risk"},{"slug":"credit-analysis","term":"Credit analysis","url":"https://dealroom.so/glossary/credit-analysis"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"}],"related_questions":[{"question":"If I significantly reduce the principal balance of my SBA 7(a) loan within the first three years, will a prepayment penalty apply?","url":"https://dealroom.so/sba-7a/questions/if-i-significantly-reduce-the-principal-balance-of-my-sba-7-a-loan-within-the-first-three-"},{"question":"What are the SBA's current policy expectations for documentation of a lender's independent credit analysis for 7(a) Small Loans?","url":"https://dealroom.so/for-lenders/questions/what-are-the-sba-s-current-policy-expectations-for-documentation-of-a-lender-s-independent"},{"question":"What is the role of the lender's credit committee in the SBA 7(a) loan approval process?","url":"https://dealroom.so/for-lenders/questions/what-is-the-role-of-the-lender-s-credit-committee-in-the-sba-7-a-loan-approval-process"},{"question":"What is the importance of a lender's detailed credit memorandum in the 7(a) loan approval process?","url":"https://dealroom.so/for-lenders/questions/what-is-the-importance-of-a-lender-s-detailed-credit-memorandum-in-the-7-a-loan-approval-p"},{"question":"How does the 'sunset of SBSS score' requirement impact a lender's credit analysis for 7(a) Small Loans?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sunset-of-sbss-score-requirement-impact-a-lender-s-credit-analysis-for-7-a-sm"},{"question":"What types of credit issues in the seller's business history could negatively impact my SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/what-types-of-credit-issues-in-the-seller-s-business-history-could-negatively-impact-my-sb"}]},"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 — Three C's of Credit","url":"https://dealroom.so/glossary/three-c-s-of-credit","source_type":"DealRoom Data"}}