Managing your credit obligations is one of the most important functions in successfully operating your business or farm. While each lending situation is unique, we evaluate the credit worthiness of potential borrowers based on a method commonly known as the "5 C's of Credit". For years, these simple, time-tested principles have successfully guided bankers in making appropriate credit decisions. We’re sharing these principles with you, because the more you become familiar with our credit review process, the better your chances will be in securing credit from Community Bank. In the end, our goal is to assist you in managing your business or farm operation more successfully.
Character
You invest your money in a strong bank: Community Bank. We want to reinvest those dollars in customers who are knowledgeable and experienced in their respective profession, and have proven to be financially competent. Along those lines, Community Bank has found that a good indicator of character is your personal credit history. Personal references, business experience, and work history can sometimes substitute, but a strong personal credit history proves you have the willingness and the discipline to repay past debts — and future obligations.
Capacity
Community Bank is a cash flow lender. That means we look to the cash flow of your business or farm as the primary repayment source for the money we lend you. Simply put, is your company able to repay the amount borrowed? We will evaluate your borrowing history and existing credit relations, and consider your ability to honor the requirements of any additional debt obligations.
Collateral
Also referred to as security, collateral represents assets that a company can pledge as an alternative repayment source for a loan. At Community Bank we make both secured and unsecured loans. Collateral can take on many forms, but in the end, a healthy and strong cash flow is the key to a successful operation. Keep in mind that we are a bank, and not a business operator. Foreclosing or repossessing collateral for liquidation is always our least favorable option for debt repayment. Therefore, regardless of your collateral position you must have ample cash flow to cover your operating expenses and debt for us to approve your loan.
Conditions
How sensitive is your company or farm to certain economic conditions? Community Bank will evaluate your ability to repay your loan in the event of a downturn in your business, or significant change to your operating environment.
Capital
How much have you personally invested in your business or farm? The amount of your own time and money put into the company portrays a message of confidence and trust. It demonstrates that you have taken the risk of funding the company, and expresses to us that you are committed to making your business a success.
AT COMMUNITY BANK, WE ARE
