The quest to define ‘creditworthy’

Calling all small-business borrowers and lenders …

We’re looking for businesses in Richmond that have tried over the past couple of years to obtain financing for their companies.

A lot has been written in the national media about the ongoing credit crunch. We want to investigate the lending situation here in Central Virginia.

So whether you’ve been able to get financing or were denied, please contact us. If you are a banker or a lender who lends to businesses, we want to hear from you, too.

The consensus in the national media is that businesses would have us believe that loans just aren’t out there. Banks say that they would love to be lending more but that the only interested borrowers are too risky. And the businesses that are creditworthy are unsure of what the future holds and are unwilling to take the risk of a new loan for expansion.

Please email Michael Schwartz at [email protected].

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Bill McDermott
Bill McDermott
10 years ago

As a banker who has loaned money to companies for over 30 years, creditworthy is defined by bankers using the 5 C’s of credit. Character-the borrower should have integrity, Collateral-the borrower has adequate collateral to cover the loan, Cash flow-the borrower has sufficient cash flow to cover payments on the debt with between a 20-50% cushion, Credit-the borrower has a record of prompt payments on prior loans and to vendors and Conditions-the overall economic environment is favorable and the trends in the particular industry are positive or at least stable.