The "6C" principles of loan review in money and banking are:
(1) Character;
(2) Capacity;
(3) Capital;
(4) Collateral;
(5) Business environment (Condition);
(6) Continuity or LAPP principle of business, namely Liquidity, Activity, Profitability, and Potentialities.
Extended information:
Detailed explanation of the 6C credit analysis method
1. Quality
It is directly reflected in the speed and amount of payment. Every credit transaction implies the customer's The company's payment commitment, if the customer is not sincere in paying, the risk of the accounts receivable will be greatly increased. Therefore, quality is considered to be the most important factor in assessing credit.
2. Capability
p>Including the customer's operating ability, management ability and debt repayment ability, the lower the company's accounts receivable risk.
3. Capital
The financial strength and financial status of the customer indicate the background in which the customer may repay the debt.
4. Collateral
The assets used as collateral when the customer refuses to pay or is unable to pay. This is especially important for customers whose details are unknown or whose credit status is disputed. Once payment is not received from these customers, the creditor can obtain compensation by handling the collateral.
5. Business environment
The internal and external environment in which the customer operates, when these environments change, will the customer's solvency be affected? If the impact is significant, the customer's credit level will be threatened.
6. Continuity
The possibility of the customer's continued operation requires a comprehensive evaluation of the customer's internal financial status, product updates, and scientific and technological development.
Baidu Encyclopedia-6C. Principles
Baidu Encyclopedia-Credit 6C Analysis Method