When assessing risk, many bank lenders look at five factors. Knowing and checking them against your operation can help you approach a lender.


  • Character. Past performance and management are important.
  • Capacity. Involves evaluating working capital or equity available.
  • Capital. The debt structure and amount of equity in the operation.
  • Cash flow. The variability and margin of cash flow available, compared to debt.
  • Collateral. Compare the amount of the loan to the amount of the collateral.