5 C's of Credit-Capacity, Conditions, Collateral, Capital, and Character
Dev Strischek Overview:
Bankers have relied on the 5 C’s of credit - capacity, conditions, collateral, capital, and character for many years, but what do these terms really mean, and how do lenders use them to determine whether a potential borrower is creditworthy?
This simple credit model is simple to understand and easy to use. The speaker explains how lenders assess each of these factors and provides practical tips for borrowers to improve their creditworthiness. Attend the session to see the big picture for credit analysis and underwriting.
Besides evaluating a borrower’s creditworthiness, the Five Cs offer a way for bankers to advise borrowers on how to improve their bankability and improve their odds of financing in the future and build a strong financial foundation for their business.
Areas Covered in the Session:
- Introduction to the Five Cs of Commercial Credit
- Explanation of each of the Five Cs: Character, Capacity, Capital, Collateral, and Conditions
- Capacity measured by the ability to repay from cash flow
- Conditions evaluated in terms of how borrowing needs change over the business cycle and what makes some industries more vulnerable to downturns than others
- Collateral analysis in terms of relative liquidation values
- Capacity considered in terms of the borrower’s equity cushion and the degree of relative leverage possible
- Character assessed in terms of willingness to repay as evidenced by payment history as well as tips for fraud prevention
Who Will Benefit:
- 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
- Lending Organizations should Consider Sponsoring this session for its Commercial and Business Borrowers so they can Understand how Lenders Evaluate them for loans
Speaker Profile
Dev Strischek A frequent speaker, instructor, advisor, and writer on credit risk and commercial banking topics and issues, Dev is principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics. As 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, Dev was chief credit officer for Barnett Bank's Palm Beach market. Besides stints at other banks in Florida, Kansas City, and Ohio, Dev's experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor in Hawaii, Missouri, and Florida. A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, he earned his M.B.A. from the University of Hawaii.
Dev serves as an instructor in the ABA’s Stonier Graduate School of Banking, the Southwestern Graduate School of Banking, the Pacific Coast Banking School, and the American Bankers Association's (ABA) Commercial Lending. 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.
Dev has written about credit risk management, financial analysis and related subjects for the ABA's Commercial Insights, the Risk Management Association's RMA Journal, and other business professional journals. He is the author of Analyzing Construction Contractors and its related RMA workshop. A past national chair of RMA and former Florida Chapter president, Dev serves as a member of the RMA Journal's advisory board, and an ex-officio board member of the Florida and Atlanta RMA chapters. He also serves on the advisory board of the Atlanta Chapter of the Professional Risk Managers' International Association (PRMIA), and he has consulted on credit risk issues with banks in Morocco, Egypt, and Angola through the US State Department's Financial Service Volunteer Corps (FSVC)