The Five Cs Of Commercial Credit: The Basic Elements Of Credit And Lending

The Five Cs of commercial credit, character, capacity, capital, collateral and conditions, are the framework lenders have long used to judge whether a business is creditworthy. This 60-minute webinar explains what each term really means and how lenders apply it.

Understanding the Five Cs helps bankers assess the risk of lending to a particular borrower, manage their risk exposure and lend responsibly. It also lets them advise borrowers on how to strengthen their creditworthiness and secure financing in the future.

The model is simple to understand and easy to use. You'll see how lenders weigh each factor, get practical tips for improving creditworthiness, and come away with the big picture of credit analysis and underwriting.

• Explain each of the Five Cs of commercial credit
• Use capacity, capital, collateral and conditions to analyze a borrower's ability to repay
• Use character to judge a borrower's willingness to repay
• Assess capacity from cash flow and collateral from liquidation value
• Advise borrowers on how to improve their creditworthiness

• Introduction to the Five Cs of commercial credit
• Each of the Five Cs: character, capacity, capital, collateral and conditions
• Capacity: the ability to repay from cash flow
• Conditions: how borrowing needs change over the business cycle and why some industries are more exposed to downturns
• Collateral: analysis based on relative liquidation values
• Capital: the borrower's equity cushion and how much leverage is possible
• Character: willingness to repay as shown by payment history, plus fraud prevention tips

Knowing how lenders think makes the credit process easier to navigate, whether you approve loans or apply for them. The session gives clear insight into how lending decisions are made and is a useful resource for anyone seeking business financing.

It suits credit analysts, underwriters, loan review officers, commercial bankers, credit and risk managers, senior lenders, bank leaders and directors, accountants and advisors, and small business owners and entrepreneurs.

• Small business owners
• Credit analysts
• Loan underwriters, Loan review officers
• Commercial bankers, Credit department managers
• Senior lenders, Chief credit officers, Credit analysts
• Credit managers, Credit risk managers
• Risk managers, Enterprise risk managers
• Chief credit officers, Senior lending officer
• Bank director, Chief executive officer
• President, Board chairman
• Financial professionals, such as accountants, bookkeepers, and financial advisors.
• Entrepreneurs who are starting a new business and need financing.

A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek principal of Devon Risk Advisory Group based near Atlanta, Georgia.  Dev advises, trains, and develops for financial organizations risk management solutions and recommendations on a range of issues and topics, e.g., credit risk management, credit culture, credit policy, credit and lending training, etc.  Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC).  PCC’s purpose is to evaluate and recommend to FASB revisions to current and proposed generally accepted accounting principles (GAAP) that are more appropriate for privately held firms.  He also serves as the PCC’s representative to FASB’s Credit Losses Transition Resource Group supporting the new current expected credit loss (CECL) standard to be implemented in fiscal year 2019 for public companies and 2020 for private firms.

The former SVP and senior credit policy officer at SunTrust Bank, Atlanta, he was responsible for developing, implementing, and administering credit policies for SunTrust’s wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. He also spent three years as managing director and credit approver in SunTrust’s Florida commercial lending and corporate investment banking areas, respectively. Prior to SunTrust, he was chief credit officer for Barnett Bank’s Palm Beach market. Besides stints at other banks in Florida, Kansas City, and Ohio, his experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor.

A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, Dev earned his M.B.A. from the University of Hawaii. Mr. Strischek serves as an instructor in several banking schools, including the Stonier Graduate School of Banking, and the Southwest Graduate School of Banking. His school, conference, and workshop audiences have included participants drawn from the ABA, RMA, OCC, Federal Reserve, FDIC, FFIEC, SBA, the Institute of Management Accountants (IMA) and the AICPA.

Mr. Strischek has written some 200 articles on credit risk management, financial analysis and related subjects, and he is the author of Analyzing Construction Contractors and instructor of  a contractor analysis workshop. A past national chair of RMA and former RMA Florida Chapter president, Dev has consulted on credit risk issues with banks in Morocco, Egypt, and Angola through the US State Department’s Financial Service Volunteer Corps (FSVC).