When assessing the creditworthiness of new entrepreneurs, lending institutions review the "Five C's." The money the entrepreneur has invested in the business, which is an indication how much is at risk if the business should fail, is known as:
A)capacity
B)capital
C)collateral
D)conditions

Question

Quizplus · Accepted Answer

The money the entrepreneur has invested in the business is known as capital, which is one of the "Five C's" that lending institutions review when assessing creditworthiness. Capacity refers to the entrepreneur's ability to repay the loan, collateral is the assets offered as security for the loan, and conditions refer to the economic environment and industry trends that may impact the business's success.

When Assessing the Creditworthiness of New Entrepreneurs, Lending Institutions Review