NEOEDD/NOBD has helped dozens of businesses in Baker, Union, and Wallowa counties launch or expand their businesses with its loan programs. The loans are “gap” loans, meant to fill gaps left by traditional lenders.
Anyone looking for loan funds should consider the 5 “Cs” of Lending, which are the factors that lenders consider when making loan decisions:
- Character: Your reputation in the community; your treatment of customers, suppliers and employees; your integrity; your financial history, which could be reflected in your credit score.
- Capacity: Your ability to repay the debt with regular (usually monthly) payments. This is often demonstrated by historic cash flow and profitability.
- Capital: The amount of investment the owners of the business are making. The amount of capital invested by owners reduces the risk of the lender and demonstrates the commitment of the owners–the owners are exposing themselves to risk.
- Collateral: Collateral is used to reduce the risk of lending. Collateral consists of assets (real estate, equipment, inventory, etc.) that are legally assigned to the lender. They can be used as a secondary source of repayment if the borrower fails to pay back a loan.
- Conditions: The operating environment (competition, market opportunities) and economic environment are important to lenders as they assess the potential of a business to be successful. The actual loan amount, interest rate and repayment terms are the second type of conditions that affect lending decisions.
NEOEDD/NOBD is an Equal Opportunity Lender, Provider, and Employer.