Glossary · Reading the business
In short
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.
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.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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