So you're trying to get business credit or funding and you're wondering:
"What are these lenders actually looking for?"
That’s a smart question.
Because real talk? It’s not just your score they're focusing on when making lending decision.
Lenders want to know who they’re doing business with.
They want to know you’re fundable.
And for decades, they’ve relied on what’s called The 5 C’s of Lending to figure that out.
These 5 factors are used to evaluate whether or not they should trust you with their money.
Let’s break them down so you know exactly what to work on if you want to get approved.
1. Character
Think of this as your financial reputation.
Lenders look at your credit reports (both personal and business) to ask one key question:
“Does this person follow through?”
If your credit is spotty, that doesn’t mean you’re doomed...it just means you have some repair or positioning to do.
And if your credit is clean, but your business profile is thin, you’ll need to show you’ve built your business the right way.
Bottom line: Character is about trust. And trust is built through patterns.
2. Capacity
Can you realistically afford to take on more debt?
Lenders look at your debt-to-income ratio and your existing financial obligations to make this call.
This is especially important if you’re trying to get high-limit credit or a loan.
They’ll ask:
- How much money is coming in?
- What’s already going out?
- Will this loan put you in a risky spot?
If your capacity looks tight, they’ll say no—even if everything else looks good.
3. Capital
This is your "skin in the game".
If you’re asking someone else to invest in your business, what are you bringing to the table?
Capital might look like:
- A down payment
- A cash reserve
- Business savings or retained earnings
If you're applying for funding and can show that you've already made a financial commitment to your growth, lenders feel a lot more confident investing in you too.
4. Collateral
This is where lenders protect their risk.
Collateral is something valuable they can seize if you default—like a car, house, equipment, or other asset.
Now, not all business credit or funding products require collateral (especially unsecured lines), but the bigger the ask, the more important this becomes.
If you don’t have collateral, you need to be extra solid on the other C’s.
5. Conditions
Here’s where the rubber meets the road...
Lenders want to know:
- Why you want the money
- How much you need
- What the loan terms are
And whether the economic conditions or industry you're in are stable
For example, if you're in an industry hit hard by inflation or supply chain issues, they’ll factor that in.
Same goes if you're asking for more than you realistically need, it can raise red flags.
So What Does This Mean for You?
If you're getting denied…
If you're confused about why your business credit apps keep hitting a wall…
If you're ready to get real funding and stop maxing out your personal credit cards...
Then understanding the 5 C’s is where you start.
But it’s not where you stop.
Truth is, most people don’t get denied because they’re unqualified.
They get denied because they didn’t know how to present their business in a fundable way.
Is that you?
Take our 2-minute Fundable Quiz and discover what’s standing between you and the funding your business deserves.
You’ll walk away knowing your fundability score, your biggest gaps, and how to fix it.
👉🏾 [Take the Fundable Quiz Now] and start building a business lenders say “YES” to.
