When Assessing the Creditworthiness of New Entrepreneurs, Lending Institutions Review

question 12

Multiple Choice

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:

• A) capacity
• B) capital
• C) collateral
• D) conditions
• E) character

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Definitions:

Buyout Price

The agreed amount for which an ownership interest in a business can be purchased outright.

Court Order

A formal instruction issued by a court that requires a person or entity to do or not do something.

Mining Partnerships

A specific type of partnership formed usually for the purpose of exploring for, developing, and operating mines and extracting minerals.

Dissolution

The process of officially ending the existence of a legal entity such as a company or partnership.