When assessing the creditworthiness of new entrepreneurs, lending institutions review the "Five C's." The ability of the entrepreneur to repay borrowed funds is known as:

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Capacity refers to the borrower's ability to repay the loan. When assessing creditworthiness, lenders need to know if the borrower has enough cash flow and income to make the monthly loan payments on time. This is the most crucial factor in determining if a borrower is a good risk or not.

When Assessing the Creditworthiness of New Entrepreneurs, Lending Institutions Review