Effects of Late or Non-payments/Applying the "C's"

Applying the "C's"
The number of variables that can influence how each “C” element is interpreted is countless. However, an international credit manager learns, through experience, the situations where one “C” may be more or perhaps less important in evaluating a credit decision.

For example, the “character” of the management may be of such a concern to an analyst (for example, the owner may have been in bankruptcy) that despite a strong company financial structure, the seller may limit credit to the buyer. Likewise, a “country” assessment may result in a risk manager requesting secured credit with a buyer located in a country that is in economic turmoil, even though this buyer is financially sound.

Usually international credit managers who have developed their skills through years of solid training, mentoring, successes and mistakes (yes, mistakes) are well-equipped to balance and weigh the “C’s” of credit in attempting to reach a decision.