Workshop Recap

The CATALYST recently hosted a valuable workshop on Financial Intelligence, facilitated by experts from National Bank of Arizona. Designed for small business owners and entrepreneurs, the session focused on empowering participants with critical financial knowledge to better navigate the lending landscape and make informed business decisions. To increase accessibility, one of the workshops was also offered in Spanish for our Spanish-speaking community.

Understanding the 5 C’s of Credit

One of the core topics covered was the 5 C’s of Credit, a foundational framework used by lenders to evaluate potential borrowers:

• Character – Reflects your industry experience and personal credit history, including your demonstrated reliability and intent to repay debts.
• Capacity – Evaluates the business’s ability to generate cash flow and profit to cover operations and loan repayments. This is often considered the most critical of the five factors.
• Capital – Represents your personal investment in the business and signals your level of financial commitment and risk.
• Conditions – Considers external factors such as the economic climate, industry trends, competition, and the intended use of the loan.
• Collateral – Includes assets or guarantees that can secure the loan and provide the lender additional assurance.

Personal vs. Business Credit

Participants also learned how personal credit can significantly influence business credit—especially for newer or smaller businesses. Your FICO score, ranging from 300 to 850, is a key component in evaluating creditworthiness. A higher score indicates lower credit risk, making loan approval more likely.

The importance of establishing and managing business credit was emphasized, as it not only verifies your business entity but also plays a crucial role in securing financing and negotiating better loan terms.

SBA Loans vs. Conventional Loans

The workshop also explored the differences between SBA-guaranteed loans and conventional loans, including subtypes, benefits, and which options may be best suited for different business needs. Understanding these options helps business owners make strategic decisions when pursuing financing.

The Value of a Strong Banking Relationship

Another key takeaway was the importance of having a strong relationship with your bank. A banker who understands you and your business can offer tailored advice, identify appropriate financing solutions, and proactively support your business’s financial health. Establishing expectations and maintaining consistent communication—such as quarterly check-ins—can be a game-changer for long-term success.

A Stronger Financial Foundation

Participants left the workshop with a deeper understanding of how the 5 C’s of Credit impact lending decisions, how to build and maintain strong business credit, and how to leverage banking relationships to support their business goals.

The CATALYST remains committed to delivering engaging, informative, and actionable workshops to support business growth. Be sure to check our calendar for upcoming opportunities to continue learning and connecting!