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The 6 C’s and the Key to Getting Business Funding

This guest blog is brought to you by NU Direction Lending, a small business lender owned by federally insured, not-for-profit credit unions. Launch CU has partnered with NU Direction Lending to assist our members with small business loans where they may not have real estate as collateral. NU Direction Lending is dedicated to assisting small businesses finance their dreams along with providing key information to help your business succeed.

The 6 C’s and the Key to Getting Business Funding

By NU Direction Lending

When you need business funding, lenders will evaluate your creditworthiness based on six key attributes. Doing so gives them insight into how much risk they are likely to take if they give you a loan and helps them determine just how much money they will lend you.

Ready to grow your business? Don’t wait to master these 6 C’s of business creditworthiness:

By calculating cash income versus cash expenditures, you can identify cash flow patterns (how much and when money is coming in and going out). Strong cash flow means you can pay upcoming bills and cover the next pay period. But, indications of a strong cash flow also show the lender that you can pay a loan back. Is your cash flow not so strong? Build your business credit capacity by paying down some debt before applying for a loan.

person holding dollar bills in a fan formation | Capacity
Couple looking at a stack of papers | Capital

Lenders are keenly interested in how much the business owners or management team have invested in the business. They also want to know about your capital assets like cash and equipment. These provide a lender with the added security that you can pay the loan back.

Your business and personal assets are considered collateral (or a secondary source of repayment) for a loan. Collateral can be cash, equipment, commercial property, inventory, or accounts receivable. A creditor will look at each form of collateral closely, as well as any debt attached to it. Be sure you have a full list of your collateral assets before you apply for a loan

woman sitting at computer with man behind her writing | Collateral
Woman writing on dry erase board while co-workers watch | Conditions

What is the current state of your business, your industry, and the economy? Although there’s not much you can do about industry trends or pending legislation, these will undoubtedly affect how much capital will be loaned due to the impact these factors might have on your ability to pay back your loan. Experts suggest you apply for a line of credit when your industry and business are in a strong position, so you have the financing available when you need it.

Your integrity and history (both credit-related and experience-related) are essential attributes. Financers like to see industry experience and solid credit history. To demonstrate your character to a lender, gather a list of professional references, such as an accountant, lawyer, or business advisor, that you can share. In addition, come prepared to explain the care and effort you have put into your business planning and management process.

Group of co-workers in board room giving each other high fives | Character
Woman sitting at desk talking on phone and looking at computer | Communication

Establishing a relationship with your lender requires frequent and forthright communication. Provide details about your business and industry, your goals, as well as your financing needs. An honest back-and-forth conversation is a great starting point when applying for a loan. Continued dialogue strengthens the relationship.

Brought to you by NU Direction Lending in partnership with Launch Credit Union. NU Direction Lending is a digital- first business lender that was formed and is funded by credit unions. To learn more about securing credit and mastering the 6 C’s, visit or contact us by email at or by phone at 866-354-7151.

© 2021 Nu Direction Lending. All rights reserved.

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