Those 5 Circles Are Back…

Those 5 Circles Are Back…

How quickly these Olympic times come around, with a bagful of new names and new records to match. There are also other “Circles” we should remember if we want a gold medal performance, The 5 C’s of Credit.

Does your Customer make the team? See if they have the necessary mettle and ask these questions:-



  • Will the Customer pay?
  • Do they have a willingness – an honest intention – to pay?
  • What is the Customer’s bare promise worth?
  • What is the history of dealing with other creditors?


  • Does the Customer have the means to raise funds for ongoing business?
  • Can they meet their commitments now and in the future?
  • What is the trading pattern of the business?
  • Can they pay according to your terms?


  • Does the Customer have sufficient assets to cover the debt?
  • What is the trading history of the business?
  • Can the Customer “ever” pay?


  • Is there some asset over which the Customer can give security? E.g. property, business assets etc
  • Is there a 3rd party who can guarantee payment?
  • Bank Guarantee?


  • What are the economic conditions in the specific industry of the Customer?
  • Is the Customer’s business poorly managed?
  • Is the business seasonal? E.g. fashion
  • Is obsolescence an issue? E.g. Technology


For more information, contact Terry Ledlin, Special Counsel


Direct line:        02-8488-3388


Ledlin Lawyers articles are intended as general information and commentary and should not be used or relied on in place of legal advice. Please seek formal advice on particular transactions, circumstances and matters related to any articles, blog posts or case studies posted on this website.



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