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