FOR MORE INFORMATION Call Navy Federal’s Business Solutions BUSINESS LOANS at 1-877-418-1462, 8 am to 7 pm, Eastern What You Need to Know Time (ET), Monday through Friday.

1-877-418-1462 navyfederal.org/business Personal. Federally insured by NCUA. Professional. © 2019 Navy Federal NFCU 1292 (10-19) Perfect for Your Business. Planning to Apply for CONDITIONS Be prepared to demonstrate that there’s a a Business Loan? market for your business. This should be based Your business is important—not just to you, on the local, regional and national economy; but to us. When you apply for a business loan, the competitiveness of the business; the type we take time to analyze your information using of industry and your experience in it; and your the “Five Cs of Credit.” experience managing a business.

UNDERSTANDING THE “FIVE Cs OF CREDIT” CHARACTER To increase the chances of getting approved This includes your educational background, for a loan, become familiar with the five Cs: business experience and personal credit capacity, capital, collateral, conditions history. Your personal credit history is and character. important because you may be required to personally guarantee the loan. Any CAPACITY references or other background information Make sure your business plan demonstrates you can provide will be considered. It helps if your business’ ability to repay the loan, as you and your employees have experience and capacity is the most critical of the five Cs. a positive reputation in your business’ industry. Specifically, we look at revenue, expenses, Before applying for a loan, answer the cash flow and repayment timing. This will following questions: include a look at your business and personal credit scores. Statistics show that the way • Is my business in compliance with all local, a person handles personal credit generally state and federal regulations? indicates how he or she will manage • Have I researched and evaluated business credit. my competition? CAPITAL • Am I providing a viable product or It’s unlikely that you’ll be able to finance service despite the competition? 100 percent of your startup or acquisition costs, so to get a loan, you’ll need to make • Am I committed to making my an investment in your business first. This business succeed? may come from deposits or money from other sources. BUSINESS PLAN HELP COLLATERAL Before applying for a business loan, When evaluating a loan application, we’ll create a business plan that demonstrates generally look at collateral as a secondary your knowledge of your market. For help source of repayment for the loan. The loan developing a plan, consider turning to the amount will be based on a percentage of people at your local Service Corps of Retired the collateral’s value, which is called the Executives (SCORE) office or visit them online loan-to-value ratio (LTV). Different types at score.org. For little to no cost, SCORE of collateral have different LTVs. will help you formulate your ideas in a business plan.